- The Federal Reserve said it will be raising the short-term borrowing rate by another 0.5%. These are the details.
The Federal Reserve said it will be raising the short-term borrowing rate by another 0.5%. This rate hike is a slowdown in a series of rate increases, but the continued hike is part of an effort to reduce inflation. This increase also matched predictions by economists.
The Fed previously hiked rates by 0.75% three times consecutively. The interest rate hikes have led to a slowdown in several areas of the economy like home sales. But Federal Reserve Chair Jerome Powell said that the full effects of the borrowing cost increase still need to be seen.
“Fifty basis points is still a historically large increase, and we still have some ways to go,” said Powell. “We will stay the course until the job is done.”
This move increases the short-term borrowing rate to a targeted range of somewhere between 4.25% and 4.5%, which is the highest level in the past 15 years. There are projections that the central bank will not slow down the rate until 2024.
