Interest Rates First Rise Since 2018
This article is based on “Fed Raises Interest Rates for First Time Since 2018” by Nick Timiraos for the Wall Street Journal. See the original article here.
The quarter-point increase has been issued by the Fed, and officials said that six more will follow.
Votes to lift interest rates have been cast by the Federal Reserve officials in an effort to slow inflation that is at its highest level in forty years. The Feds voted on Wednesday, raising the interest rates, and has placed in six more by the year’s end, the most aggressive in more than a decade.
The rise in interest rate will be between 0.25% and 0.5%, a staggering increase from the Feds’ benchmark rate, making it the first rate increase in 4 years.
It is expected that officials will lift it to 2% by year-end, slightly higher than what prevailed before the pandemic hit the economy, where the rates were slashed to near zero.
The rate is rising to 2.75% by the end of 2023 according to their Median projection. This is the highest it has been since 2008 when the pandemic brought many setbacks in trade and industry.
This is the first in-person meeting for the Feds in two years, as chairman Jerome Powell commented “As I look around the table in today’s meeting I saw a committee that’s acutely aware of the need to return the economy to price stability and determined to use our tools to do exactly that.”