The Federal Reserve has taken another decisive step against inflation, which is the highest in the United States in 40 years. The Federal Open Market Operations Committee voted unanimously to raise the base rate by 0.75 percentage points.
Raising prime interest rates
“Inflation remains elevated due to pandemic-induced supply-demand imbalances, higher food and energy prices, and broader price pressures,” said the Federal Open Market Operations Committee (FOMC), which decides interest rates within the Fed. rates. And he raised the base rate to a level of 2.25 to 2.5 percent, which is an increase of 0.75 percentage points, as expected by most experts.
The US market remains robust
The key interest rate is now at a level that most members of the Federal Reserve Board consider neutral. That is, for one that cannot be equated with either an expansionary or a restrictive monetary policy. But due to the circumstances, the rapid increase in interest rates has a clearly restrictive effect, which, according to the Fed, is already reflected in some macroeconomic indicators. However, the US labor market still remains very robust, the Fed noted.
