In the fight against inflation, the United States Federal Reserve (Fed) announced on Wednesday another strong hike of 0.75% in interest rates and warned that he now expects growth in the world’s largest economy to be close to zero in 2022.
The Fed’s benchmark interest rates are now in a range of between 3.00% and 3.25%announced the institution in a press release.
This is the third time in a row that the Fed has raised rates on this scaleafter the increase of a quarter of a point in March and a half point in May.
It also estimates that further increases will be necessary this year, according to the statement, until the official interest rate rises another percentage point.
The Fed is “strongly committed to getting inflation back to 2% and will remain so until the job is done,” Fed Chairman Jerome Powell said at a news conference after the statement.
He even warned that a “premature easing of monetary policy” carries risks.
The increase in rates automatically makes loans to individuals and companies more expensive. The aim is to curb economic activity and thus relieve pressure on prices.
“We have to readjust supply and demand. And our way of doing that is to slow down the economy,” Powell explained.
Real estate loan rates, for example, have risen since the beginning of the year and have just exceeded 6% for 30-year loans for the first time since 2008. This depresses sales in a sector that has been in very good health since the start of the pandemic.
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