The US Federal Reserve announced the interest rate hike by half a percentage point, in the first step of this size since 2000, as part of its efforts to contain the highest inflation rate recorded in the country in 4 decades, while its Chairman, Jerome Powell, said that the US economy is still strong despite the slowdown. growth, stressing that this does not pose any stagnation risks currently.

After an increase of a quarter of a percentage point last March, the Federal Reserve decided to raise the rates to between 0.75 and 1%;

In a move that falls within the framework of tightening his policy to calm the economy, noting that further increases "may be appropriate", according to the Monetary Policy Committee of the US Central Bank.

The committee also noted the "uncertain" impact of external factors, including the Russian invasion of Ukraine, which is putting additional pressure on inflation and is likely to affect economic activity.

In addition, the commission's statement made it clear that COVID-19-related shutdowns in China "are likely to exacerbate supply chain disruptions."

Inflation continued to rise in the United States and was exacerbated by the war in Ukraine, and in March it reached an unprecedented peak since December 1981, reaching 8.5% within one year, according to the "CPI" index approved by the Central Bank. American standard.

Jerome Powell: The US central bank will move quickly to raise interest rates to contain rising inflation (Reuters)

Powell said Wednesday that the US central bank will move quickly to raise interest rates to contain the rising inflation, and the Federal Reserve Chairman explained - in a press conference in Washington - that the American economy is strong, and nothing suggests that it is close or vulnerable to recession, indicating the possibility of approval of other increases.

Powell had announced before the central bank governors on the sidelines of the International Monetary Fund meetings that it was "very necessary" to stabilize prices and raise interest rates "quickly".

The US central bank has two main tasks: ensuring price stability and eliminating unemployment.

In March, Jerome Powell estimated that the labor market was at an "unhealthy" level.

The unemployment rate is close to its level before the Corona pandemic (3.6% in March, compared to 3.5% in February 2020), but companies have been facing months of labor shortages and mass resignations every month.

In order to attract job candidates and retain employees, companies increase wages, which leads to increased inflation.

Following the interest rate hike announcement, Wall Street shares rose.

At 19:30 GMT Wednesday, the "Dow Jones" index rose by 2.4 percent to 33 million and 917 thousand and 72, while the "Standard & Poor's" 500 rose by 2.5 percent to 4 million and 277 thousand and 78, and the "Nasdaq" index jumped 2.6 % to 12 million and 886 thousand and 82.