US Federal Reserve hikes rates by half percentage point, starts bnce sheet reduction June 1
WASHINGTON: The US Federal Reserve on Wednesday raised its benchmark overnight interest rate by half a percentage point, the biggest jump in 22 years, and said it would begin trimming its bond holdings next month as a further step in the battle to lower inflation.
The US central bank set its target federal funds rate to a range between 0.75% and 1% in a unanimous decision, with further rises in borrowing costs of perhaps similar magnitude likely to follow.
Despite a drop in gross domestic product over the first three months of the year, "household spending and business fixed investment remain strong. Job gains have been robust," the rate-setting Federal Open Market Committee said in a statement following the end of its latest two-day policy meeting in Washington.
Inflation "remains elevated" with the war in Ukraine and new coronavir s lockdowns in China threatening to keep pressure high, it said. "The Committee is highly attentive to inflation risks."
The statement said the Fed's bnce sheet, which soared to about $9 trillion as the central bank tried to shelter the economy from the Covid-19 pandemic, would be allowed to decline by $47.5 billion per month in June, July and August and the reduction would increase to as much as $95 billion per month in September.
Policymakers did not issue fresh economic projections after this week's meeting, but data since their last gathering in March have given little sense that inflation, wage growth, or a torrid pace of hiring had begun to slow.
Fed Chair Jerome Powell is scheduled to hold a news conference at 2:30 pm EDT.
This will put more pressure on RBI to increase rates further.
Fekuji ne achha din layenge. Just wait...forever..
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Realities,1. World demand of oil has not gone up, prices have gone up,2. World food production has gone up and the demand has to come down, but wastage has gone up and prices have gone up,3. US interest rates have gone up by 1 basis points, home mortgage rates have gone up from 2% to 5% but many currencies are losing to USD forcing Pakistan and Srilanka to near bankruptcy.,4. Peace loving so called democrats have turned to warmongers affecting millions of people,5. China’s capacity has not gone ...
Coordinated across economies, RBA, RBI and the FED... Tighten your belts ladies and gentlemen and yes no life jackets under the seats...
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Just how markets reacted to Reserve Bank of India and Federal Reserve's interest rate moves is a study in contrast. Over there the markets were well prepared for the hike taking cues from the hawkish statements emanating from the Federal Reserve for the past several months and zoomed once the rate hike was announced. Whereas over here, you have a delusional Finance Minister and Governor in a vehemently denial mode about spiralling inflation and misleading market participants all along before del ...
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Everywhere it is rnt nflation trampling the common man to ground. In India it has been wose.
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let's see what will happen ?
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US FOLLOWING BHARAT'S FOOT PRINT.. JAI BHARAT.
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Liberandu logic" Repo rate hikes by RBI is a disastrous for economy. Repo rate hikes by fed reserve bank is a good move".
All these hikes are due to the Russia Ukraine war, which is causing inflation.
This was inevitable as we can't live on lowest rates since GFC forever. Current inflation is getting worst across the globe and all countries will sooner or later lift rates as there are no other options
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US & China are again on the brink of recession.. Impact of crude prices can create subprime defaults..India is also facing hyperinflation
Sucking people dry is the culmination of capitalist dream and BJP is blindly following that trap with a moron finance minister and the Feku idiot at the top!
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Well the US economic scenario is pretty diffrent when compared to India. It is an economy that is doing very well with robust demand, burgeoning exports and vibrant employment, in stark contrast to India where the economic performance is tepid with high unemployment and under employment despite adoption of ultra loose monetary policy. It is an unprecedented demand led driven inflation in US with a transparent data mon oring sy em allowing the Federal Reserve to take active cues from it ...
Sooner or later this was to happen.i think the sooner Interest rates are hiked by atleast 150 to 200 basis points the better would be for the economy. US has followed RBI. Let the critics say anything but the middleclass and specially the senior citizens will benefit from the rate hikes.
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US has not followed RBI. The federal reserve has been preparing the markets for several months to brace for a rate hike. RBI governor and our Finance Minister on the other hand were in a denial about raging inflation and misleading our markets; the out of turn rate hike exemplifies this ditherence and indecisiveness. The RBI which was never bothered about unprecedented inflation was forced to act only because foreign exchange reserves was fast depleting and the Federal Reserve action could ma ...
had congress raised the rates 22 years ago, this administration could have avoided raising the rates.
Tomorrow Indian market will bounce with fed decision
Russia - Ukraine war will have more impact globally if its not stopped... countries were coming out from Covid Pandemic and then got hit by war..
India cannot do anything about it. It's the global commodity and fuel prices that are increasing and disruption in supply chain due to Covid.
US is a preeminent economic super power now and all countries will have a bearing on this step.