US Central Bank Federal Open Market Committee (FOMC) ) was convened on Wednesday to raise the federal funds rate by 50 basis points (bps). The 0.5 percent rise follows a three-quarter rise codified in the last few months. The FOMC rate hike follows recent US inflation reports that showed consumer prices fell below expectations to 7.1%.
Fed Raises Fed Funds Rate by 50bps, Central Bank Expects More Up
Consumer Price Index (CPI) Report Released Tuesday 19} In response, members said the US Federal Reserve Board met on Wednesday and announced a 50 basis point rate hike. December’s gains are smaller than the previous four 3/4 points (75bps) gains.
“The committee aims to achieve maximum employment and inflation of 2% over the long term,” the FOMC said. In response, the committee decided to raise the target range for the federal funds rate from 4.5% to 4.5%.” The Fed expects another 75bps hike in the federal funds rate by the end of next year.
The news is that his CPI data on Tuesday was higher than expected as indicators showed inflation rose 7.1% from his year earlier in November. It follows that it did not rise. According to the U.S. Bureau of Labor Statistics (BLS), core CPI rose 0.2% in the month. “Over the past 12 months, the all-commodity index increased by 7.1% pre-seasonally adjusted,” he elaborates the BLS CPI report. The FOMC report said the Fed will continue to monitor “forward-looking information on the economic outlook.”
“Furthermore, the Commission will use Treasury bills, agency debt, agency We will continue to reduce our holdings of mortgage-backed securities in May,” FOMC members revealed. “The committee is strongly committed to returning inflation to its 2% target,” the FOMC added. Equity markets and precious metals prices fell as banks signaled further rate hikes could come.
Cryptocurrency prices also fell, withBitcoin (BTC) price falling below the $18,000 zone after his FOMC statement. The Fed has codified a number of rate hikes this year, with one 0.5 percentage point increase and four three-quarter point increases, for a total of five Federal Funds hikes in 2022. will be
Finally, Fed Chairman Jerome Powell said in a speech at the Brookings Institution in Washington in November that the easing of rate hikes in December could be very successful. implied. Powell faces political pressure over rate hikes, with Tesla’s Elon Musk warning against recent aggressive rate hikes.
Fed Chairman Powell told reporters on Wednesday afternoon that “there is still work to be done” and that “inflation risks are on the upside.”
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