The Federal Reserve raises interest rates by 0.75 points for the second consecutive month

The Federal Reserve (Fed), which was so complacent with inflation, something temporary said its president Jerome Powell, has now adopted an aggressive stance in its fight to cool the rise in prices.

NewsEditor
NewsEditor
27 July 2022 Wednesday 16:53
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The Federal Reserve raises interest rates by 0.75 points for the second consecutive month

The Federal Reserve (Fed), which was so complacent with inflation, something temporary said its president Jerome Powell, has now adopted an aggressive stance in its fight to cool the rise in prices.

In an unusual response and in a unanimous decision, the Fed has raised interest rates by 0.75 points for the second consecutive time, while the specter of recession looms ever more present. It already rose another 0.75 points in June.

This decision means that the US central bank has chained four increases in the price of money, to place it in the 2.25%-2.50% range, since March.

Once again, the Fed attributes to the war in Ukraine, "with a tremendous human cost", the condition of being the main factor that leads to rising prices and damaging the global economy. On this occasion, however, the reference to China's covid-zero policy and its impact on the supply chain has disappeared from his statement.

But in that document it is recognized for the first time that "recent spending and production indicators have softened." This is the prelude to the fastest tightening of monetary policy in the United States in decades in the face of pressing inflation. Wall Street has given a good reception, partly because it was expected.

The Federal Reserve has shown its intention of more increases throughout this year, “in a percentage that is considered appropriate”, Powell remarked.

On this occasion, it has not opted for an increase of one point, as many analysts bet after an inflation of over 9% last June. Powell has stressed that the labor market remains strong, but he has considered that the Fed should act without a doubt to tackle the high cost of products, well above the 2% target set by the Fed.

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