On Wednesday, the US Federal Reserve agreed to raise interest rates to a level not seen in 16 years, despite the economy’s unstable state due to the financial crisis.
From March 2022, when interest rates were 0 and the Fed began its aggressive drive to combat inflation, the average interest rate of the Fed has increased by a quarter point ten times. The interest rate is currently between 5% and 5.25%.
The Fed chair, Jerome Powell, has constantly stated that the reduction of inflation, which reached a 40-year high during the Covid-19 outbreak, should be the central bank’s top priority.
The Federal Reserve indicated in a statement that the financial system was “sound and strong.”
“Stricter credit requirements for individuals and enterprises are going to have an impact on economic growth, job growth, and inflation. The scope of these consequences is still unknown. The committee continues to pay close attention to inflation risks, according to the Fed.
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