US Biggest Interest Rate Hike in 22 Years

Published / Last Updated on 04/05/2022

The U.S.  Federal Reserve raised its benchmark interest rate to a target rate range of between 0.75% and 1%pa on Wednesday,

Despite a surprise slowdown in economic activity rippling through from Ukraine, inflation was a 41 year high of 8.5%pa in March.

This prompted the Fed to act with its first double rate high of 2 X 0.25%pa since 2000.

Comment

Usually, central banks move interest rates upwards and downwards by no more than 0.25%pa.  Smoothly transitioning upwards or downwards prevents economic shock.

This double hike was a surprise.  In addition, the Fed also suggested that this will not be the first double hike for 2022 if inflation remains high.

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