Federal Reserve Raise Interest Rates by 75 Basis Points

Federal Reserve
Pictures Credit: via Unsplash by Joshua Woroniecki

The Federal Reserve on Wednesday (15 June 2022) has raised the interest rates by three-quarters of a percentage point. The action taken by Fed is to curb the surge in the inflation, foreseen slow economy and rising unemployment. This is the biggest hike that has ever happened since 1994.

Consumer price Index of US is 8.6% as of May 2022 which is more than the forecast of 8.3% and highest since 1980s. Generally, The Central Bank aims at keeping the inflation around 2% annually but couldn’t since COVID-19.

How This Will Influence the Market?

The higher interest rates will lead to increase in credit card, mortgages and car loans. Thus, it makes all the borrowing extremely expensive. On the other side, this will lead to improve the rates on savings accounts.

The Federal Reserve ra...

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