The US Federal Reserve (Fed) on Wednesday raised its benchmark interest rate by 0.75 percentage points, marking the sharpest rate hike since 1994, as data released in recent days showed no clear signs of easing in inflation.
“Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures,” the Fed said in a statement after a two-day policy meeting, adding that the institution is “highly attentive to inflation risks.”
The US Labour Department reported on Friday that the consumer price index skyrocketed 8.6 percent in May from a year earlier, marking the third straight month of inflation over 8 percent and hitting a new four-decade high. The figures, which exceeded consensus estimates, dashed hopes that inflation had peaked.
Fed hikes US interest rate 0.75 points: The Federal Reserve announces the most aggressive interest rate increase in nearly 30 years, raising the benchmark borrowing rate by 0.75 percentage points as it battles against surging inflation. pic.twitter.com/DkcQicn5g6— World News 24 (@DailyWorld24) June 15, 2022
Some analysts say the domestic and foreign policies of the US government and the imbalance of the economic structure of the country are the root cause of the inflation.
🇺🇸💲US #FederalReserve has hiked interest rates by 0.75% in an effort to curb soaring #inflation. But will it be effective? Christian Lawrence from Rabobank thinks not. 'We're seeing the Fed raise rates & hike the US into a recession' bc it can't control food & energy prices #F24 pic.twitter.com/UkGnDF1Yno— Kate Moody (@kateamoody) June 15, 2022