▲ Fed Chairman Jerome Powell


The US, which is suffering from the worst inflation since the end of 1981 due to sharply soaring prices, made a super strong push to raise interest rates sharply to catch inflation.



The Federal Reserve (Fed), the central bank of the United States, announced that it would raise its key interest rate by 0.75 percentage points in a statement after the regular meeting of the Federal Open Market Committee (FOMC).



As a result, the US benchmark interest rate has risen significantly from the previous 0.75-1.00% level to the 1.50-1.75% level.



It is the first time in 28 years since 1994 that the Fed has taken the 'giant step' of raising interest rates by 0.75 percentage points.



Earlier in March, the Fed raised interest rates by 0.25 percentage points for the first time in three years to catch the soaring inflation since the COVID-19 pandemic, ending the era of zero interest rates. Step) The rate hike was carried out.



Federal Reserve Chairman Jerome Powell said last month that he would consider an interest rate hike by 0.5 percentage points in June and July while drawing a line on the possibility of a 0.75 percentage point rate hike right after the big step.



However, as the record price rise did not subside and the 'inflation peak theory' shook, the Fed showed a resolute will to stabilize inflation by blitzing the interest rate by 0.75 percentage points.



The US Consumer Price Index (CPI) for May, announced on the 10th, rose 8.6% from the same period last year, the steepest in 40 years and 5 months since December 1981.



When the CPI exceeded its forecast in May, the market, which had initially expected the Fed to raise the key interest rate by 0.5 percentage points, also released revised forecasts that the Fed would raise by 0.75 percentage points.



Looking at the dot plot, which is an indicator of the future interest rate prospects of the FOMC members, they predicted the interest rate level at the end of this year to be 3.4%.



This is an increase of 1.5 percentage points from last March.



The Fed also downgraded its forecast for U.S. economic growth this year to 1.7%, 1.1 percentage points lower than the 2.8% it released in March, and raised its inflation forecast for this year to 5.2% from 4.3%.



In disclosing the size of the rate hike, the Fed said it "expects that a continued increase in the range of interest rate targets will be appropriate", heralding the possibility of continued rate hikes.



(Photo = Getty Images Korea)