Further rate hikes are needed to bring inflation back to the 2% target over time, according to the Fed.
The US Federal Reserve System (FRS) raised the interest rate on federal funds (federal funds rate) by 50 basis points to 4.25-4.5% per year. This was stated in a press release from the Fed, published on Wednesday, December 14.
The decision was taken unanimously and in line with the forecasts of most economists and analysts, and the rate reached its highest level since 2007.
The Fed expects further rate hikes will be needed to bring inflation back to its 2% target over time, the report said. At the same time, inflation was 7.1% in November. According to the published forecast of officials, in 2023 the rate will exceed 5%.
The last time the Fed applied a 50 basis point rate hike was in May. After that, the regulator moved to the most aggressive tightening of monetary policy since the 1980s – it raised the rate four times in a row by 75 basis points at a time.
It was previously reported that the stock index S & P500 fell to the lowest level in almost two years. This is due to concerns about the aggressive policy of the US Federal Reserve.
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Source: korrespondent
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