{"id":16311,"date":"2022-07-28T01:03:22","date_gmt":"2022-07-28T01:03:22","guid":{"rendered":"https:\/\/undergroundnews.co.uk\/?p=16311"},"modified":"2022-07-28T01:03:24","modified_gmt":"2022-07-28T01:03:24","slug":"fed-unveils-75-basis-point-rate-hike-flags-weakening-economic-data","status":"publish","type":"post","link":"https:\/\/undergroundnews.co.uk\/?p=16311&lang=en","title":{"rendered":"Fed unveils 75-basis-point rate hike, flags weakening economic data"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Mishaal Arshad C.M Underground News<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Federal Open Market Committee says that it remains &#8220;highly attentive&#8221; to inflation risks.<\/strong><\/li><li><strong>Policy rate is now at the level most Fed officials feel has a neutral economic impact.<\/strong><\/li><li><strong>Rate also matches high point of central bank&#8217;s previous tightening cycle from late 2015 to late 2018.<\/strong><\/li><\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-cnvs-separator-id-1658970051405\"\/>\n\n\n\n<p class=\"wp-block-paragraph\">WASHINGTON: The Federal Reserve raised its benchmark overnight interest rate by three-quarters of a percentage point on Wednesday in an effort to cool the most intense breakout of inflation since the 1980s, with &#8220;ongoing increases&#8221; in borrowing costs still ahead despite evidence of a slowing economy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8220;Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures,&#8221; the rate-setting Federal Open Market Committee said as it lifted the policy rate to a range of between 2.25% and 2.50% in a \u00a0unanimous vote.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The FOMC added that it remains &#8220;highly attentive&#8221; to inflation risks.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But while jobs gains have remained &#8220;robust,&#8221; officials noted in the new policy statement that &#8220;recent indicators of spending and production have softened,&#8221; a nod to the fact that the aggressive rate hikes they have put in place since March are beginning to bite.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Coming on top of a 75-basis-point hike last month and smaller moves in May and March, the Fed has raised its policy rate by a total of 225 basis points this year as it battles a 1980s-level breakout of inflation with 1980s-style monetary policy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The policy rate is now at the level most Fed officials feel has a neutral economic impact, in effect marking the end of pandemic-era efforts to encourage household and business spending with cheap money. The rate also matches the high point of the central bank&#8217;s previous tightening cycle from late 2015 to late 2018, a level reached this time in the span of just four months.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The latest policy statement gave little explicit guidance about what steps the Fed may take next, a decision that will depend heavily on whether upcoming data shows inflation beginning to slow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With the most recent data showing consumer prices rising at more than a 9% annual rate, investors expect the U.S. central bank to raise the policy rate by at least half a percentage point at its September meeting.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8220;From here, it is possible that the Fed slows its tightening pace, reassured by the likely peaking of inflation and pullback in inflation expectations as oil prices have fallen,&#8221; Seema Shah, chief global strategist at Principal Global Investors, said in a note.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8220;However, with the labour market still a picture of strength, wage growth still uncomfortably high and core inflation set to decline at a glacially slow pace, the Fed certainly cannot stop tightening, nor can it downshift gears too much.&#8221;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In the US Treasury market, which plays a key role in the transmission of Fed policy decisions into the real economy, yields were little changed by the Fed&#8217;s announcement, with the yield on the 10-year note down 2 basis points on the day and the yield on the 2-year note unchanged.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Stocks on Wall Street held onto broad gains in the session, while the dollar edged lower against a basket of major trading partners&#8217; currencies.<\/p>\n","protected":false},"excerpt":{"rendered":"Mishaal Arshad C.M Underground News Federal Open Market Committee says that it remains &#8220;highly attentive&#8221; to inflation risks.&hellip;\n","protected":false},"author":3,"featured_media":16315,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"csco_singular_sidebar":"","csco_page_header_type":"","csco_appearance_grid":"","csco_page_load_nextpost":"","csco_post_video_location":[],"csco_post_video_location_hash":"","csco_post_video_url":"","csco_post_video_bg_start_time":0,"csco_post_video_bg_end_time":0,"footnotes":""},"categories":[50,76,71,34],"tags":[],"class_list":["post-16311","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","category-important-news","category-latest-news","category-world","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/16311","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16311"}],"version-history":[{"count":1,"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/16311\/revisions"}],"predecessor-version":[{"id":16316,"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/16311\/revisions\/16316"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=\/wp\/v2\/media\/16315"}],"wp:attachment":[{"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16311"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16311"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/undergroundnews.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16311"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}