The Federal Reserve raised interest rates by the most since 2000 on Wednesday as part of efforts to fight 40-year-high inflation.
Officials serving on the Federal Open Market Committee (FOMC) agreed to hike the benchmark fed funds rate by 50 basis points, bringing it to a target range of 0.75 percent to 1 percent. The central bank’s decision was in line with the market expectation.
“There is a broad sense on the committee that additional 50 basis points increases should be on the table at the next couple of meetings,” Fed Chairman Jerome Powell announced at a post-meeting press conference.
The Fed will also begin trimming its nearly $9 trillion balance sheet. The institution confirmed that it will start selling $47.5 billion in assets per month. After three months, the central bank would increase asset reductions to $95 billion per month, a measure that might reduce liquidity from money markets for several years.
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