On Wednesday, the U.S. Federal Reserve raised the federal funds rate by 75 basis points (bps) in order to tame inflation and stabilize the American economy. The recent rate hike is the U.S. central bank’s third rate increase after increasing the benchmark rate by 50 bps last March.
Fed Hikes Rate by 75 bps for a Second Time in a Row to Tame Inflation, Central Bank Says ‘Inflation Remains Elevated’
With inflation scorching hot in America, the U.S. Federal Reserve has raised the federal funds rate once again, increasing it by 75 bps on Wednesday afternoon at 2:00 p.m. (ET). The increase was the second 75 bps increase in a row.
“Recent indicators of spending and production have softened. Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low,” the Fed said on Wednesday in a press statement. “Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.”
With today’s 75bp rate hike the Fed has raised rates to the level it got to in 2018 before caving.
$9 trillion in debt has been added since.— Sven Henrich (@NorthmanTrader) July 27, 2022
The move follows the recent Consumer Price Index (CPI) report which notes that CPI data reflected a 9.1% year-over-year increase. June’s CPI data had risen at the fastest yearly rate since 1981.
It also comes after the recent debate over the technical definition of a “recession.” This past week the White House published two blog posts that claim a second consecutive quarter of negative gross domestic product (GDP) does not indicate the U.S. is in a recession.
One of the Biden administration’s blog posts featured Treasury secretary Janet Yellen who confirmed that she believes it is not the “technical definition” of a recession despite websites like Investopedia defining it as a recession and economic resources and business cycle textbooks.
Powell’s first line:
The Fed is working expeditiously to bring inflation down.
— Callie Cox (@callieabost) July 27, 2022
After the comments from White House and Yellen concerning a recession, the economist Paul Krugman said “ignore the two-quarter rule… We might have a recession, but we aren’t in one now,” in a recently published blog post. This is after the fact that Krugman apologized for being wrong about inflation.
During this month’s Fed meeting, the U.S. central bank claimed Russia is hurting the…
Click Here to Read the Full Original Article at Bitcoin News…
