The rate of economic growth in America slowed in the fourth quarter of last year to 2.6 percent, which is slightly less than expectations of 2.7 percent, indicating that the interest rate hikes by the US Federal Reserve are curbing growth in the world’s largest economy.
The US Department of Commerce revised the growth rate in the fourth quarter of 2022 down to 2.6 percent in the last reading of growth, compared to 2.7 percent in the second reading, which is lower than the growth rate in the third quarter of 3.2 percent.
The US Federal Reserve raised key interest rates, by 25 basis points, this month, in line with expectations, to reach a range between 4.75 and 5 percent, at the highest level since September 2007, that is, before the global financial crisis.
This is the ninth consecutive increase approved by the Federal Reserve since last year in an attempt to curb inflation, which reached its highest level in about 4 decades in 2022, before gradually declining and reaching 6 percent last February on an annual basis.
The interest rate hike and forecasts announced by the US Federal Reserve indicated that it remains very focused on reducing inflation to its 2 percent target, indicating that it still sees price inflation as a greater threat to growth than the recent turmoil in the banking sector.