US Fed hikes interest rate by 75bps

Published June 16, 2022
— AFP/File
— AFP/File

WASHINGTON: The Federal Reserve announced the most aggressive interest rate increase in nearly 30 years, raising the benchmark borrowing rate by 0.75 percentage points on Wednesday as it battles against surging inflation.

The Fed’s policy-setting Federal Open Market Com­­m­ittee reaffirmed that it remains “strongly committed to returning inflation to its 2pc objective” and expects to continue to raise the key rate.

Until recently, the central bank seemed set to approve a 0.5-percentage-point increase, but economists say the rapid surge in inflation put the Fed behind the curve, meaning it needed to react strongly to prove its resolve to combat inflation The super-sized move was the first 75-basis-point increase since November 1994.

Fed Chair Jerome Powell will hold a press conference after the meeting to provide more details on the central bank’s plans, which will be closely watched for signals on how aggressive policymakers will be in coming meetings.

Committee members now see the federal funds rate ending the year at 3.4pc, up from the 1.9pc projection in March, according to the median quarterly forecast.

Published in Dawn,June 16th, 2022

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Digital growth
Updated 25 Apr, 2024

Digital growth

Democratising digital development will catalyse a rapid, if not immediate, improvement in human development indicators for the underserved segments of the Pakistani citizenry.
Nikah rights
25 Apr, 2024

Nikah rights

THE Supreme Court recently delivered a judgement championing the rights of women within a marriage. The ruling...
Campus crackdowns
25 Apr, 2024

Campus crackdowns

WHILE most Western governments have either been gladly facilitating Israel’s genocidal war in Gaza, or meekly...
Ties with Tehran
Updated 24 Apr, 2024

Ties with Tehran

Tomorrow, if ties between Washington and Beijing nosedive, and the US asks Pakistan to reconsider CPEC, will we comply?
Working together
24 Apr, 2024

Working together

PAKISTAN’S democracy seems adrift, and no one understands this better than our politicians. The system has gone...
Farmers’ anxiety
24 Apr, 2024

Farmers’ anxiety

WHEAT prices in Punjab have plummeted far below the minimum support price owing to a bumper harvest, reckless...