O Federal Reserve central bank of United States , announced this Wednesday (27) that it raised the country’s interest rate by 0.75 percentage point. As a result, it goes from the range of 1.5% to 1.75% per year to 2.25% to 2.5%.
The increase is the fourth in a cycle of interest rate hikes that began in March 2022. The rate started the cycle at 0% per year, and the increases are the first since 2018. A 0.75 pp increase had already been made by the Fed in June, in highest value since 1994 .
The autarchy’s movement reflects an effort to combat highest inflation in the United States in more than 40 years fueled by a mismatch between supply and demand and rising prices of commodities linked to the pandemic and the war in Ukraine, in addition to high demand with a heated economy and low unemployment.
The decision followed market expectations and had already been signaled by central bank officials throughout the month, after the Fed left the option open after its June meeting.
The market remains alert to the possibility of the United States going into recession due to high interest rates. Recent data indicated a possible contraction in the country’s economy sooner than expected, with investors betting now on a less aggressive cycle by the Fed.
In update
*With information from Reuters
Source: CNN Brasil
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