US Interest Rates Soar – Good Returns
The US Federal Reserve has raised the benchmark interest rate by 75 points, as was almost universally expected.
Thursday, September 22, 2022 at 9:08 am
Eric Frikberg
But it didn’t go to 100, which some people thought was possible.
That action raises the federal funds rate target range from 3% to 3.25%.
In a statement, the Federal Reserve said moderate output growth and solid employment growth were pushing prices higher.
“Inflation continues to rise, reflecting pandemic-related supply and demand imbalances, higher food and energy prices, and broader price pressures,” the statement said.
The statement further accused the war with Ukraine of creating further upward pressure on inflation.
The Federal Reserve said it is trying to achieve maximum employment and 2% inflation in the long term.Current US inflation is 8.3%.
He added that the Fed will continue to monitor developments and that its assessment will consider the various effects of monetary policy on public health, labor market conditions, inflation and the economy at large.
High interest rates in the US usually entice investors to appreciate the currency for better returns. This usually causes the US dollar to rise in value and others to fall against it.
The New Zealand dollar is among them, falling to US$0.5850 ahead of the news before recovering slightly to US$0.58554 after the Fed’s statement was released.
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