US Fed to raise interest rate by 0.5% following May Focus on impact on yen

The Federal Reserve Board, the central bank of the United States, will hold a two-day meeting to decide monetary policy from the 14th.

With no signs of convergence in record inflation, it is expected to decide on a significant 0.5% rate hike following May, with a focus on the impact on the yen's depreciation.

To curb inflation, the Fed lifted its zero interest rate policy in March to raise interest rates by 0.25%, and in May it embarked on a significant 0.5% rate hike for the first time in 22 years.

However, the rate of increase in consumer prices in May was 8.6%, a record level for the first time in about 40 and a half years, and there are no signs that inflation will converge.

Given this situation, the Fed is expected to decide to raise the policy rate by 0.5% following May at a meeting on the 14th and 15th.

The meeting will also provide participants' expectations of the pace of future rate hikes.

Inflationary pressures are intensifying due to rising wages due to labor shortages in addition to soaring energy prices, and the Fed will further accelerate monetary tightening, including expanding the rate hike to an unusual 0.75%. There is also an observation that.

In the foreign exchange market, the yen is depreciating rapidly against the backdrop of the difference in the direction of monetary policy between the United States and Japan, and the reaction of the yen to the outcome of the meeting is also the focus.