The Federal Reserve might increase a key U.S. interest rate by 1/2-point increments at upcoming meetings if inflation remains high or gets even worse, according to minute of the central bank’s last strategy session in March.
The Federal Reserve signaled its plans to increase a key U.S. interest rate by 1/2 percentage point steps at upcoming meetings if inflation remains high or gets even worse, according to minutes of the central bank’s last strategy session in March.
The Federal Open Market Committee lifted its benchmark fed funds rate by a quarter point instead — from near zero to a range of 0.25% to 0.5%.of Ukraine,” the minutes said, “a number of participants” decided that a “25 basis point increase would be appropriate at this meeting.” The minutes also indicated the central bank is likely to begin to reduce its $9 trillion balance sheet starting as early as May.
Low interest rates enabled people to buy more homes, new cars, appliances and other big-ticket items and helped to boost the economy. Fed officials are also worried that Covid-related lockdowns in China could exacerbate supply-chain bottlenecks that have been a big contributor to inflation.