Fed raises interest rates by a half-point – Thelocalreport.in

0
11


(NewsNation) — The Federal Reserve closed out 2022 by announcing another interest rate hike on Wednesday.

The Fed hiked interest rates by half a percentage point in an ongoing effort to combat inflation, even as a recent report showed inflation slowing. It’s a smaller increase than previous rate hikes.

In a press conference, Chair Jerome Powell said the rate hike is part of the agency’s ongoing effort to reduce inflation to the goal of 2 percent, a marker far below the current rate. This latest rate hike is lower than previous hikes, which came in at .75 points.

Powell said the full effects of the Federal Reserve’s rapid tightening over the past year have yet to be felt but also signaled that the Fed will likely be raising rates in 2023. He acknowledged the rate hikes come with real hardship for people, but stressed the goal It is about long-term stability and maximum employment.

This latest rate hike brings the target interest rate to 4.25 to 4.5 percent. Cumulatively, the hikes have led to much costlier borrowing rates for consumers as well as companies, in areas ranging from mortgages to auto and business loans. Worries have grown that the Fed is raising rates so much in its drive to curb inflation that it will trigger a recession next year.

The more interest rates rise, the more consumers will find themselves paying

if they take out a new mortgage or car loan. And for those who carry a balance on credit cards, where rates fluctuate with the economy, those debts will accrue interest more quickly, too.

LEAVE A REPLY

Please enter your comment!
Please enter your name here