Canada

Federal Reserve raises benchmark interest rate by another 75 points

The US central bank did what was expected on Wednesday and raised benchmark lending rates by three-quarters percentage points as it stepped up its struggle to curb runaway inflation.

The Federal Reserve has raised its benchmark rate (known as the federal funds rate) to 2.5 percent.

This is consistent with Bank of Canada’s interest rates after the Bank of Canada raised full percentage points earlier this month.

After lowering interest rates in the early days of the pandemic, central banks around the world have recently begun aggressively raising lending rates to address inflation, which has risen to its highest point in decades.

Official inflation in the United States exceeded 9% last month, but is now above 8% in Canada.

Dejardan economist Royce Mendes said the US federal funds rate is now at its highest point in the last business cycle, and the central bank’s decision puts the fight against inflation at the top of the Federal Reserve. He added that it became clear that it was a priority. It has already peaked and the recession may be imminent.

“It looks like a central bank that is very focused on fighting inflation, even in the face of weakening the underlying economy,” Mendes said.

Federal Reserve Chairman Jerome Powell will talk more about banking thinking at a press conference Wednesday afternoon.

Federal Reserve raises benchmark interest rate by another 75 points

Source link Federal Reserve raises benchmark interest rate by another 75 points

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