United States: In the face of inflation, the Fed proceeds with the largest rate hike since 1994

United States: In the face of inflation, the Fed proceeds with the largest rate hike since 1994

ECONOMY – The US Federal Bank hopes to slow inflation without triggering a recession

The Fed is putting the brakes on. The US central bank raised its key rates by three-quarters of a point on Wednesday, the biggest increase since 1994, and its president assured that the institution remained “determined” to fight against galloping inflation.

This is the third increase in a row in these rates, which are now in a range between 1.50 and 1.75%, and set the tone for loans granted to individuals and businesses. But we should expect other hikes of the same order in the coming months: meeting,” at the end of July, he added. Because bringing inflation back to around 2% is the priority. And most of the leaders of the institution see the rates climbing, by the end of the year, to the range of 3.25 to 3.50%.

8.6% inflation over one year

The inflation figures for May, published on Friday, had the effect of a cold shower: the rise in prices has not slowed down, as it had been the case in April. It even reached a new record in 40 years, at 8.6% over one year. The Fed favors another measure, the PCE index, whose data for May will be released on June 30.

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