Federal Reserve raises interest rates by 0.75%
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| US Federal Reserve raises interest rates |
The Federal Reserve raised the interest rate by 0.75% for the second consecutive meeting, coinciding with the rise in inflation to the highest level in several decades in the United States of America.
After increasing interest rates on Wednesday, July 27, 2022, the interest rate ranges between 2.25% and 2.5%, and the decision to increase the interest rate is the fourth in the past five months.
Federal Reserve Chairman Jerome Powell announced that inflation remains high, reflecting supply and demand imbalances related to the pandemic and high food and energy prices. Powell also announced the Fed's commitment to return inflation to the 2% target.
Is the US economy suffering from the recession?
In the same context, Jerome Powell stated that he does not believe that the US economy is in a recession because many areas of the economy are doing very well.
The US GDP declined by 1.6 percent in the first quarter on an annual basis, while markets are preparing to release second-quarter data on Thursday, July 28, which could show consecutive declines.
Market expectations are that the Fed will start cutting rates by next summer, although the committee's forecast released in June shows no cuts until at least 2024.
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