BREAKING: The US Central Bank has announced its biggest interest rate rise in nearly 30 years. apiotrowski9 9News READ MORE:
It signalled more large rate increases to come that would raise the risk of another recession.
Americans are also starting to expect high inflation to last longer than they had before. This sentiment could embed an inflationary psychology in the economy that would make it harder to bring inflation back to the Fed's 2 per cent target. Borrowing costs have already risen sharply across much of the US economy in response to the Fed's moves, with the average 30-year fixed mortgage rate topping 6 per cent, its highest level since before the 2008 financial crisis, up from just 3 per cent at the start of the year.
Biden has sought to show he recognises the pain that inflation is causing American households but has struggled to find policy actions that might make a real difference.The president has stressed his belief that the power to curb inflation rests mainly with the Fed. Investments around the world, from bonds to Bitcoin, have tumbled in recent months on fears surrounding high inflation and the prospect that the Fed's aggressive drive to control it will cause a recession.
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