Fed Increases Rates by Half a Percentage Point, Biggest Hike Since 2000

Fed Increases Rates By Half a Percentage Point, , Biggest Hike Since 2000.

Chairman of the Federal Reserve Jerome Powell announced the half point interest rate hike on May 4.

He stated that Powell the hike is a response to inflation, which "is much too high” and the action is an attempt to "expeditiously to bring it back down.”.

Powell also signaled that further increases in interest rates could be on the horizon.

There is a broad sense on the committee that additional 50 basis point increases should be on the table at the next couple of meetings, Jerome H.

Powell, Fed Chair, via 'The New York Times'.

The Federal Open Market Committee statement cited “lockdowns in China" and the war in Ukraine as further strains to the supply chain.

[These and other] related events are creating additional upward pressure on inflation and are likely to weigh on economic activity, Federal Open Market Committee Statement, via 'The New York Times'.

Because of the global situation, the Fed reiterated its close monitoring of the U.S. economy and inflation.

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The committee is highly attentive to inflation risks, Federal Open Market Committee Statement, via 'The New York Times'.

Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures, Federal Open Market Committee Statement, via 'The New York Times'.

Take the time to understand each other.

Some analysts have predicted rate increases as high as three-quarters of a percent.

According to Powell, an increase of that size is “not something the committee is actively considering.”.

What they are trying to do is tell the market — inflation could be higher in the near term, Gennadiy Goldberg, TD Securities, via 'The New York Times'.

Powell expressed that he does see a way forward.

I do expect that this will be very challenging, it’s not going to be easy.

[But] I think we have a good chance to have a soft or soft-ish landing, Jerome H.

Powell, Fed Chair, via 'The New York Times'