- The US Federal Reserve (FED) signaled an imminent increase in key interest rates on Wednesday.
- The central bank had previously announced that it intends to raise the key interest rate up to three times this year. Because a higher interest rate would slow down inflation, but also the economy.
- Consumer prices in the US rose by seven percent in December – the strongest in decades.
The US Federal Reserve declared on Wednesday after the monetary policy meeting that it would leave the key interest rate in the range of zero to 0.25 percent. In view of the high inflation and the good situation on the labor market, however, the Fed intends to raise interest rates soon. It would be the first rate hike since late 2018. Immediately after the announcement, the US dollar appreciated moderately.
Legend:
The economy is doing well and no longer needs additional support from the central bank, US Federal Reserve Chairman Jerome Powell explained the planned increase in the key interest rate in December 2021.
key stone
Analysts are already expecting the first increase since the beginning of the corona pandemic at the next meeting on March 16. Several members of the central bank council had recently signaled an increase in the key interest rate for the largest economy. Many analysts are expecting an increase of 0.25 percentage points as a first step. In the current year, four tightenings by a total of one percentage point are expected on the markets.