“We anticipate that ongoing increases in the target range for the federal fund rates will be appropriate,” Powell said. Powell said the Fed felt the 0.75% hike was the “right magnitude in light of the data” – and suggested the central bank could slow the pace of its planned increases moving forward. The fresh high for inflation renewed pressure on Powell and top policymakers to bring down prices that are slamming household budgets.
The Fed’s latest rate hike came two weeks after dismal June inflation data revealed prices surged 9.1% in June - the highest since November 1981. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.” “Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low. “Recent indicators of spending and production have softened,” the FOMC said in a statement. The Fed has now hiked rates by three-quarters of a percentage point for the second straight month - with the previous 0.75% increase marking the first of its kind since 1994. “I do not think the US is currently in a recession and the reason is, there’s just too many areas of the economy that are performing too well,” Powell said at a press conference. The rate-making Federal Open Market Committee announced the hike of 0.75%, or 75 basis points, after a two-day meeting.įed Chair Jerome Powell acknowledged the Fed’s actions were likely to have a dampening effort on growth and cause “softening” in the labor market - but rejected the notion that the US was already in a recession. The Federal Reserve approved another steep hike in its benchmark interest rate on Wednesday, pushing forward with a plan to tackle decades-high inflation despite fears the moves could trigger a recession. White House accused of redefining the word “recession” US GDP shrank 0.9% in second quarter, signaling a recession Yellen denies US recession as GDP drops for 2nd straight quarter US faces ‘L-shaped’ recession as Fed scrambles to tame inflation: analyst
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