inflation rate

 

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Inflation: The US Federal Reserve raises interest rates by fifty basis points

The US central bank raised interest rates again, and warned that more hikes would be necessary to curb the pace of rapid price increases.

And the Federal Reserve's forecasts showed that the bank's main interest rate may exceed 5 percent annually from now.

But lawmakers have begun to move more cautiously, after signs that the country's biggest inflation in decades is beginning to abate.

They agreed to raise the bank's key interest rate by half a percentage point.

That pushed the Fed's benchmark interest rate target range up from 4.25 percent to 4.5 percent - the highest rate in 15 years.

 

Is inflation improving?

 

The increase, announced on Wednesday, is the seventh by the Fed this year.

 

The bank responds to inflation in the United States, which remains close to its highest level in 40 years, although it has fallen since it reached a peak of 9.1 percent in June, supported by lower energy costs.

 

The latest US figures showed that consumer prices fell 7.1 percent in the 12 months ending in November, from October prices of 7.7 percent.

 

A significant decline in the US financial markets after statements about raising interest rates

The United States raises interest rates to the highest rate in 22 years.

 

Powell said the bank had been motivated by indications of improving inflation, but that it would take "significantly more evidence" to be confident it was on a sustainable downward trajectory.

He added, "It is good to see progress, but we have a long way to go to return to price stability."

By increasing borrowing costs, the Fed hopes to cool economic activity and ease upward pressures.

But lawmakers risk starting a sharp economic downturn in the world's largest economy.