ANALYSIS: The US central bank said it would take into account “cumulative tightening” before deciding its next move, initially sending stocks higher.
| The US Federal Reserve’s fourth jumbo rate rise in a row came as no surprise on Wednesday , but there was enough in the policy statement toOne sentence in particular, and the only major change to the US central bank’s statement from its previous meeting, mentioned “cumulative tightening”.
And although the Fed funds rate might have been climbing since March, it has been just three months since the central bank officially started its quantitative tightening program, in which it sells off bonds and other securities sucking up all the cheap money in the economy.
Even with such a huge reduction in the money supply, Powell is pressing on. The chairman told reporters he thought the final level of interest rates would be higher than many people originally expected to tame inflation.
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