Diplomacyindia.com

US Fed makes biggest rate hike since 1994

US Fed makes biggest rate hike since 1994
June 16
09:00 2022

Washington, June 16 (IANS) The US Federal Reserve raised the interest rate by 0.75 percentage points, the highest on-shot increase since 1994, to tackle inflation that is at its highest in 40 years.

The rate hike was announced at the end of the two-day policy meeting of the fed. It ran contrary to smaller rate hikes of 0.50 percentage points that had been indicated by several members of the fed’s top decision making committee, the Federal Open Market Committee.

“We thought that strong action was warranted at this meeting and we delivered on that,” Federal Reserve Chair Jerome H. Powell said in a news conference announcing the decision. “It is essential that we bring inflation down if we are to have a sustained period of strong labor market conditions that benefit all…The current picture is plain to see: The labor market is extremely tight and inflation is much too high.”

He added: “Clearly today’s 75 basis point increase is an unusually large one and I do not expect moves of this size to be common.” But he went on to indicate that the next hike, due in July, could be between 50 or 75 basis points in July. “We will however make our decisions meeting by meeting.”

Powell indicated the path to a soft-landing when the Fed is able to slow down the economy without drastic cuts is becoming increasingly improbable. The Fed said in a release that it is strongly committed to 2 per cent inflation, which is currently at 8.6 per cent, a massive 40 year record.

The steep hike will make mortgages, auto loans and credit cards more expensive. These hikes are aimed at cooling a heated economy by reducing demand. But some people worry that the aggressive hikes could cool the economy too much and bring in recession and trigger waves of layoffs.

Countries around the world are also deploying interest rate hikes as a weapon against inflation.

The Reserve Bank of India raised its key interest rate (known as repo rate) by 0.5 per cent to 4.9 per cent last week citing “upside risk to inflation.”

This came on the heels of a 0.4 per cent increase to 4.4 per cent last month.

The European Central Bank announced last week that it would also raise its key interest rate for the first time in more than a decade next month and follow it with another in September.

Related Articles

0 Comments

No Comments Yet!

There are no comments at the moment, do you want to add one?

Write a comment

Write a Comment

<

On the Eve of 30th Years of Independence of Republic of Uzbekistan, H.E. Dilshod Akhatov, Ambassador of Uzbekistan to India in conversation with Ameya Sathaye, Editor-in-Chief.

Denmark Ambassador to India Freddy Svane in conversation with Amb Pradeep Kapur & Ameya Sathaye, Editor-in-Chief

Italy india will work closely together for G20 : Italy Envoy to India

Do you know why FINLAND is ranked number ONE in Happiness index, watch this interview with Finland Ambassador to India

Exclusive Interview : H.E. Jasem Ibrahem Al Najem Ambassador of Kuwait to India speaks on India Kuwait bilateral relations

ड्रैगन ने हाथी को क्यों डसा, भारत- चीन रिश्तों की कहानी- रंजीत कुमार के साथ अमेय साठे की विषेष चर्चा ड्रैगन ने हाथी को क्यों डसा, भारत- चीन रिश्तों की कहानी- रंजीत कुमार के साथ अमेय साठे की विषेष चर्चा 0 comment Read Full Article

H.E. Reuben Gauci, Ambassador of Malta to India speaks on India-Malta Bilateral Relations

Portugal supports India in covid crisis : Portugal Ambassador Carlos Pereira Marques speaks with Ameya Sathaye, Editor-in-Chief

Vietnam Ambassador to India, Pham Sanh Chau speaks on Vietnam support to India in tackling covid crisis

Netherlands supports India in covid crisis : Netherlands Ambassador Marten van den Berg speaks with Ameya Sathaye

Envoy Speaks : Gopal Baglay, Indian High Commissioner to Sri Lanka speaks on Bilateral relations, business opportunities, Tourism & people to people to people contacts

Kuwait reciprocates, we stand with India in this hour of crisis : Kuwait Ambassador to India

Canadian High Commissioner, Nadir Patel speaking on support to India in covid crisis

Italian Ambassador to India, Vincenzo de Luca speaking on Italy support to India in covid crisis

H.E. Mr. Reuben Gauci, Malta High Commissioner to India speaks with Ameya Sathaye, Editor-in-Chief of Malta support to India in covid crisis

Danish Ambassador to India Freddy Svane speaking on Denmark aid to India

Video Interview with Vinod Daniel, CEO, India Vision Institute, Board Member, International Council of Museums & Chairman, Ausheritage

DENMARK AMBASSADOR FREDDY SAVNE VISIT TO CORONOVIRUS VACCINE FACILITY AT HYDERABAD, A TRIP ORGANISED BY MINISTRY OF EXTERNAL AFFAIRS, GOVT OF INDIA FOR FOREIGN ENVOYS BASED IN INDIA.

MALTA HIGH COMMISSIONER TO INDIA, H.E. REUBEN GAUCI SHARING HIS IMPRESSION ABOUT HIS VISIT TO HYDERABAD : TRIP ORGANISED BY MINISTRY OF EXTERNAL AFFAIRS, GOVERNMENT OF INDIA FOR ENVOYS BASED IN INDIA TO UPDATE ON CORONAVIRUS VACCINE

H.E. Mr. Dinesh Bhatia, Ambassador of India to Argentina in conversation with Ameya Sathaye, Editor-in-Chief

Pictures of Formal Launch of Website Diplomacyindia.com

Exclusive Interview with Prime Minister of Guyana, H.E. Mr. Moses Veerasammy Nagamootoo during his recent visit to India.Highlights of the interview were Indian Cultural Connect, Vibrant Bilateral Ties and Cultural Connect and India’s Economic Prowess.

Video Message from Shri Prakash Javadekar, MoS (IC) for Forest, Environment & Climate Change on eve of Formal Launch of Website Diplomacyindia.com

Message from Gen. V K Singh, (Retd.) Hon’ble MoS, External Affairs to Diplomacyindia.com

WP2Social Auto Publish Powered By : XYZScripts.com