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Saturday, July 2, 2022

Federal Reserve announces new rate hike

WASHINGTON ( Associated Press) – The US Federal Reserve is set to announce its biggest interest rate hike since 1994 on Wednesday – a bigger increase than expected and a sign that central banks are trying to rein in high inflation. struggling to.

The Fed will almost certainly raise its benchmark short-term rate by a percentage point to three quarters, which is significantly higher than the normal quarterly point, in the range of 1.5% to 1.75%. He will almost certainly also predict additional rate hikes for the rest of the year.

This would increase consumer and business borrowing costs, increasing the likelihood of an economic downturn and increasing the risk of a recession. Previous hikes by the Fed have raised mortgages by about 2% since the beginning of the year and reduced home sales.

Other central banks around the world are also moving quickly in trying to curb inflation, including a nation at greater risk of recession than the United States. The European Central Bank is expected to raise a quarter point in July, its first increase in 11 years. It may announce higher growth in September if inflation remains at record levels. On Wednesday, the ECB promised to create market support that could protect member states from the kind of financial turmoil that erupted during the debt crisis more than a decade ago.

The global effects of higher lending prices are increasing the risk of a severe economic slowdown in the United States, Europe and elsewhere. Last week, the World Bank warned of the danger of slowing growth coupled with high inflation around the world.

By the end of 2022, the Fed will have raised its benchmark rate to between 3.25% and 3.5%, some economists estimate, higher than what was estimated a few weeks ago.

World Nation News Desk
World Nation News Deskhttps://worldnationnews.com/
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