The US central bank raised the US key interest rate by 0.75 percentage points to curb high inflation. This is the fourth rate hike by the Federal Reserve this year. In the past three times, interest rates have risen by three-quarters of a percentage point each time.
The chance of a rate hike increased sharply earlier this month. Inflation in the world’s largest economy slowed slightly, but less than experts expected.
The Fed’s previous efforts to contain high inflation did not seem to have the desired effect. Because of the increase, interest rates are now between 3 and 3.25 percent.
The Fed is expected to raise interest rates further in the near future. The central bank now expects interest rates to be 4.4 per cent by the end of this year. This means that the next rate move of 0.75 percentage point appears imminent. Policy makers expect interest rates to rise to 4.6 per cent next year.
Investors fear sharp increases in interest rates by central banks will lead to a global recession. The Fed said on Wednesday that the bank is “on high alert to inflation risks.” The central bank also said that further rate hikes would be appropriate and that the bank was determined to bring inflation back to its 2 percent target.
