The U.S. central bank has made it clear for the fourth time in a row that it does not intend to tolerate the highest inflation rate in 40 years. The Open Market Operations Committee at the Federal Reserve decided to raise rates by 0.75 percentage points.
Pace at the top
The Federal Reserve raised interest rates for the sixth time in a row since this March. And at the same time at the fastest pace since the turn of the 1970s and 1980s, when Paul Volcker, the Fed governor at the time, went to fight similarly high inflation.
Calmer pace maybe as early as a month
His current successor, Jerome Powell, hinted after the announcement of the decision that already at December’s monetary policy meeting there could be a slightly milder interest rate hike missing than three quarters of a percentage point. “It may be this early, but no decision has been made. But we will very likely discuss that at the next monetary policy meeting,” said Powell.
The current interest rate for open market repo operations is set by the Fed at 3.75 to 4 percent. As recently as March, the rate was at an interval of 0.25 to 0.5 per cent, where it was raised after about two years from technical zero. The United States had previously had a zero Fed base rate for the last time in December 2008.
