JUST IN: The US Federal Reserve has increased its cash rate by 0.75 per cent. 9News
Today's decision marks the Fed's toughest policy move since the 1980s to fight inflation. It will also likely cause economic pain for millions of American businesses and households by pushing up the cost of borrowing for things like homes, cars, and credit cards.
Federal Reserve Chairman Jerome Powell acknowledged the economic pain this rapid tightening regime may cause. "No one knows whether this process will lead to a recession or, if so, how significant that recession would be," Powell said in a press conference following the central bank's policy announcement, which came after a two-day monetary policymaking meeting.The Fed's updated Summary of Economic Projections, released Wednesday, reflects that pain.
US gross domestic product, the main measure of economic output, was revised down to 0.2 per cent from 1.7 per cent in June. That's well below analysts' estimates - Bank of America economists had estimated that GDP would be revised to 0.7 per cent. Inflation projections also grew. Core Personal Consumption Expenditures, the Fed's favoured measure of rising prices, is projected to hit 4.5 per cent this year and 3.1 per cent in 2023, the Fed's SEP showed. That's up from June projections of 4.3 per cent and 2.7 per cent, respectively.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
‘Dr Doom’ Nouriel Roubini expects ‘long, ugly’ recession and a plunge on Wall StreetThe economist, who correctly predicted the 2008 financial crisis, sees a “severe” recession in the US and globally that could last all of 2023 and braces for sharp sharemarket losses.
Read more »
Australia seeing the ‘impact’ of inflation ‘already’Commonwealth Bank Head of Fixed Income and FX Strategy Martin Whetton says we’re seeing the “impact” of inflation “already”. “In housing, in consumption, in confidence, they’re already coming through and there’s been quite a lag in the way that the first hike through to it is actually hitting bank accounts,” Mr Whetton told Sky News Business Reporter Edward Boyd. “Very soon we’re going to start to see a real slowing down in the demand side and I think ultimately that will impact inflation.”
Read more »
Global economy ‘on a knife’s edge’ says RBA deputy governorReserve Bank deputy governor Michele Bullock sees worrying signs in Europe, the US and China.
Read more »
Brickworks saw inflation coming 15 months ago, well before the RBAThe boss of Brickworks says there’s a long pipeline of new home construction because of backlogs, delays and tradie shortages.
Read more »