The move is intended to curb inflation though previous increases this year have had little effect so far
With the US economy teetering on the edge of a recession and inflation running at a four-decade high, the
The US central bank is aggressively raising rates at levels unseen since the mid-1990s as it struggles to tamp down soaring prices, which rose by an annual rate ofThe hike raises the Fed’s cost of borrowing to between 2.25% and 2.5% and is the Fed’s fourth rate increase this year. It comes as central banks worldwide seek to calm price rises with higher rates. Fed chair Jerome Powell indicated that there would be more outsized increases ahead if inflation is not brought under control.
However, Wall Street stocks lifted sharply after Powell’s statement was seen by some investors as easing concerns that even higher rate hikes could follow this year. The tech-heavy Nasdaq jumped more than 4% and the benchmark S&P 500 index was up 3.9% as both registered their biggest one-day percentage gains since April 2020.
Recessions are, however, officially declared by the National Bureau of Economic Research , a research group that uses a broad range of measures including jobs growth to decide when the US economy is shrinking. The NBER often makes its announcement well after a recession has begun, as it assesses other economic factors.
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