The Federal Open Market Committee (FOMC), the Federal Reserve body responsible for monetary policy in the United States, has announced an interest rate hike of 75 basis points to 3.75-4%, the highest level since 2008 This is the sixth consecutive rate hike, the fourth in a row of 75 basis points, for the most aggressive campaign since the 1980s.
In March, the US Central Bank announced the first hike in interest rates (by 25 basis points) since December 2018. Decisive hikes to tackle inflation, which is still very high and at the highs of the last 40 years.
Analysts believe that the Fed will decide to slow down, given the weakness of some macroeconomic data, and to proceed with a 50 basis point hike in December.
Then they expect two consecutive hikes of 25 points at the beginning of 2023. That way, rates would hit 5% in March.
Interest rates were lowered to 0-0.25% in March 2020, to counter the negative effects of the coronavirus pandemic on the US economy.
The Fed chairman Jerome Powell explains the decision at a press conference.