<Anchor>
The US raised the key interest rate by 0.5 percentage points as expected.
It is the first time since 2000 that the US raised interest rates so much at once.
That means that it is urgent to catch the price, and the US authorities have decided to collect the money that is loose in the market from next month.
I will read the report of New York Correspondent Kim Jong-won first, and then continue the story.
<Reporter>
US Federal Reserve Chairman Jerome Powell said he wanted to tell the American people directly and that inflation is serious.
[Jerome Powell/Chairman of the US Federal Reserve: I know that inflation is too high and there are difficulties.
We are also moving quickly to bring it back.]
At the same time, it was announced that the 'big step' would raise the interest rate by 0.5 percentage points all at once.
It is the first time in 22 years since 2000 that the Federal Reserve raises interest rates by 0.5 percentage points, which is twice that rate, at once, which is usually adjusted by 0.25 percentage points when raising or lowering interest rates.
As a result, the U.S. benchmark interest rate has moved to the 0.75-1% level.
Chairman Powell predicted two or three more 0.5 percentage point rate hikes in the future, but he did draw a clear line on the possibility of a 'giant step', that is, a 0.75 percentage point increase that has been raised in the market all at once.
[Jerome Powell/Chairman of the US Federal Reserve: The perception that a 0.5 percentage point rate hike is necessary at the next two or three meetings is widespread in the committee.
A plan to raise interest rates by 0.75 percentage points is not being considered by our committee.]
The Fed announced that it would start next month with 'quantitative tightening', a stronger inflation suppression measure, along with a rate hike.
In the meantime, we plan to sell the bonds we had bought to release the money back to the market and collect up to $95 billion each month, bringing in a total of $9 trillion, or KRW 1,400 trillion in Korean money.
(Video coverage: Lee Sang-wook, video editing: Kim Jin-won)
--- Correspondent Kim Jong-won of
<Anchor>
is connected.
Conversely, when interest rates rise, stock prices tend to fall, but the New York Stock Exchange rather rises?
<Reporter>
Yes, today (the 5th) the New York Stock Exchange rose significantly to around 3% in all three major indices.
The stock market has risen even though interest rates have taken a 'big step', and the 0.5% point increase has already been announced, so it is an atmosphere that has been fully reflected in the market.
The key was whether to take the 'giant step', which raises 0.75 percentage points all at once, and this was exactly what Chairman Powell drew.
Instead, he said he would raise rates two or three times by 0.5 percentage points, but there are five more Fed monetary policy meetings this year.
Considering this, it is calculated that the base interest rate in the US at the end of this year will range from 2.75% to a maximum of 3%.
This appears to reflect any such relief as it does not significantly exceed the so-called 'neutral interest rate', or 2.5%, which the Fed considers not to have a significant impact on the economy.
<Anchor>
Of course, it is important to catch the sharp rise in inflation, but there were also concerns that the economy could sink if the money line was too tight.
[Reporter
] Chairman Powell was confident that there would be no recession.
Let's hear it for yourself.
[Jerome Powell/Chairman of the US Federal Reserve: The US economy is in a very strong state, and there is no sign of a recession.]
Some experts believe that in 1994, the Fed raised rates seven times without notice. They are optimistic that the US economy is not depressed even when the percentage point is raised, but there are also strong oppositions.
Compared to the beginning of this year, the US stock market has already fallen a lot, and there are many voices worrying about an economic downturn, saying that the price of US Treasury bonds has fallen particularly sharply.
In particular, in 1994, as I just mentioned, the US Treasury price fell sharply due to an interest rate hike, and the US economy was doing well, but it had a huge impact on the global economy.
The reality is that these concerns are emerging.
(Video coverage: Lee Sang-wook, video editing: Jo Moo-hwan)