The Federal Reserve did not prepare any surprises for the markets. It raised its base rate by half a percentage point. For the first time, after four more upward steps, there was a slowdown in anti-inflationary policy.
Repeated interest rate increases
On Wednesday, the Federal Open Market Committee (FOMC), which decides on monetary policy tools within the Fed, voted by a majority to raise interest rates by half a percentage point. The Fed’s base rate is thus currently in the range of 4.25 to 4.5 percent.
“The FOMC is highly sensitive to inflation risks. Any further interest rate hikes will reflect current developments with the aim of bringing inflation back to the 2% threshold as soon as possible,” the FOMC members said in a press statement.
Governor says increase is in order
Fed Governor Jerome Powell confirmed that a slowdown in rate hikes is in order. “It’s not important now how fast rates rise,” Powell said during the press conference. According to him, the key question now is at what level the rate increase will stop. He also indicated that they will continue to grow in 2023, during which they could rise slightly above five per cent.
