The move the Fed announced after its latest policy meeting will increase its benchmark short-term rate, which affects many consumer and business loans, to a range of 1.5% to 1.75%.
WASHINGTON — The Federal Reserve on Wednesday intensified its drive to tame high inflation by raising its key interest rate by three-quarters of a point — its largest hike in nearly three decades — and signaling more large rate increases to come that would raise the risk of another recession.
The Fed’s three-quarter-point rate increase exceeds the half-point hike that Chair Jerome Powell had previously suggested was likely to be announced this week.
Yet the Fed’s rate hikes are blunt tools for trying to lower inflation while also sustaining growth. Shortages of oil, gasoline and food are escalating prices. The Fed isn’t ideally suited to address many of the roots of inflation, which involve Russia’s invasion of Ukraine, still-clogged global supply chains, labor shortages and surging demand for services from airline tickets to restaurant meals.
Borrowing costs have already risen sharply across much of the U.S. economy in response to the Fed’s moves, with the average 30-year fixed mortgage rate topping 6%, its highest level since before the 2008 financial crisis, up from just 3% at the start of the year. The yield on the 2-year Treasury note, a benchmark for corporate borrowing, has jumped to 3.3%, its highest level since 2007.
Over the next two years, the officials are forecasting a much weaker economy than was envisioned in March. They expect the unemployment rate to reach 3.7% by year’s end and 3.9% by the end of 2023. Those are only slight increases from the current 3.6% jobless rate. But they mark the first time since it began raising rates that the Fed has acknowledged that its actions will weaken the economy.
Expectations for larger Fed hikes have sent a range of interest rates to their highest points in years. The yield on the 2-year Treasury, a benchmark for corporate bonds, has reached 3.3%, its highest level since 2007. The 10-year Treasury yield, which directly affects mortgage rates, has hit 3.4%, the highest level since 2011.
Argentina Últimas Noticias, Argentina Titulares
Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.
Fed raises key interest rate in largest hike since 1994The Federal Reserve on Wednesday intensified its drive to tame high inflation by raising its key interest rate by three-quarters of a point — its largest hike in nearly three decades.
Leer más »
Fed attacks inflation with its largest rate hike since 1994WASHINGTON (AP) — The Federal Reserve on Wednesday intensified its drive to tame high inflation by raising its key interest rate by three-quarters of a point — its largest hike in nearly three decades — and signaling more large rate increases to come that would raise the risk of another recession.
Leer más »
Fed attacks inflation with its largest rate hike since 1994WASHINGTON (AP) — The Federal Reserve on Wednesday intensified its drive to tame high inflation by raising its key interest rate by three-quarters of a point — its largest hike in nearly three decades — and signaling more large rate increases to come that would raise the risk of another recession.
Leer más »
Fed Hikes Its Benchmark Interest Rate by 0.75 Percentage Point, the Biggest Increase Since 1994The Federal Reserve is raising interest rates by 3/4 of a percentage point, its biggest hike since 1994, as it seeks to clamp down on inflation.
Leer más »
Fed hikes interest rates by three-quarters of a percentage point in boldest move since 1994It's the largest rate hike since 1994, and will affect millions of American businesses and households, pushing up the cost of borrowing for homes, cars and other loans in order to force a slowdown in the economy
Leer más »
BREAKING: Bitcoin Remains Steady as Fed Announces Biggest Rate Hike Since 1994Bitcoin briefly spiked 4% on the news only to instantly give up those gains
Leer más »