US Fed raises interest rates 75 basis points for 3rd straight time

US Fed raises interest rates 75 basis points for 3rd straight time

US Fed raises interest rates 75 basis points for 3rd straight time

This Wednesday, US Federal Reserve made an announcement for raising its interest rate by 75 basis points 3rd time consecutively, aiming to fight the growing inflation.

FOMC (Federal Open Market Committee) decided to raise the target for the federal funds to 3-3.25% range.  

This decision took place after increase in interest rate to 75 basis point was made by the Central bank. This was the large interest rate increase in 28 years on 15th June 2022, followed with another increase of 75 basis points on 27th July 2022.

So far, FED has raised to total 300 basis points or 3% since March. Meanwhile FOMC indicates that the ongoing increase will be appropriate in the target range.

As per the FED in the monetary policy decision statement, the recent indicators point to modest growth in spending and production. Inflation continues to increase, reflecting the imbalance of supply and demand related to pandemic, higher food and energy prices, and broader price pressure.

As per FOMC, they are looking forward to achieve inflation at 2% in the long run, being attentive towards the inflation risk.

The aggressive rate increase by FED comes amid rising the producer and consumer process that are hovering around their highest in 40 years. An increase of 8.3% in August in the consumer inflation has been witnessed, over 8.1% market estimate while it peaked at 9.1% in June.

US Fed raises interest rates 75 basis points for 3rd straight time