BREAKING: The Federal Reserve intensified its drive to curb the worst inflation in 40 years by raising its benchmark short-term interest rate by a sizable half-percentage point — its largest in 22 years.
File photo of Federal Reserve Chair Jerome Powell speaking during a news conference in Washington on March 3, 2020.
The Fed also announced that it will start reducing its huge $9 trillion balance sheet, which consists mainly of Treasury and mortgage bonds. Those holdings more than doubled after the pandemic recession hit as the Fed bought trillions in bonds to try to hold down long-term borrowing rates. Reducing the Fed’s holdings will have the effect of further raising loan costs throughout the economy.
Yet by most measures, the overall economy remains healthy. This is especially true of the U.S. job market: Hiring is strong, layoffs are few, unemployment is near a five-decade low and the number of job openings has reached a record high. Even if the Fed’s benchmark rate were to go as high as 2.5% by year’s end, Powell said last month, the policymakers may still tighten credit further — to a level that would restrain growth — “if that turns out to be appropriate.” Financial markets are pricing in a rate as high as 3.6% by mid-2023, which would be the highest in 15 years.
Malaysia Latest News, Malaysia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Forex Today: Markets gear up for first 50 bps Fed rate hike since 2000Here is what you need to know on Wednesday, May 4: Following Tuesday's choppy action, markets remain calm early Wednesday as investors move to the sid
Read more »
Central Bank Watch: Fed Speeches, Interest Rate Expectations Update; May Fed Meeting PreviewRates markets are fully pricing in a 50-bps rate hike by the Federal Reserve on Wed. We’ll discuss how markets may react to the rate decision starting at 13:45 EDT/17:45 GMT on Wednesday.
Read more »
U.S. stock futures rise as market awaits what could be the biggest Fed rate hike since 2000Stock futures are pointing to a modestly higher open, though with investors cautious as a key decision on interest rates awaits from the Federal Reserve.
Read more »
Here’s how you can prepare if there's a half point rate hike from the FedAs the Fed tries to pump the brakes on inflation, it will get more expensive to borrow. Here's how to prepare.
Read more »
Fed poised to hike rates by half a percentage point to fight inflationThe Federal Reserve is expected to raise interest rates again Wednesday, this time by half a percentage point, in an aggressive step toward combating the highest inflation in 40 years.
Read more »
Fed raises key rate by a half-point in bid to tame inflationThe Federal Reserve intensified its drive to curb the worst inflation in 40 years by raising its benchmark short-term interest rate by an sizable half-percentage point
Read more »