Following the first pause on interest rate hikes in months, the FED is raising the interest rate by 25 Bps this month. The Federal Reserve has opted to return to raising interest rates to continue its fight against inflation.
The FED’s last interest rate hike was by 25 bps in May. While the US inflation numbers fell to 3%, a lower-than-expected number, the Federal Reserve has made the decision to return to raising rates. The total rate now stands between 5.25% and 5.5%. The new rate is the highest interest rate since 2001. It is also the 11th increase in over a year.
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The FED first began its aggression in raising interest rates in March 2022. Reports suggest that this could possibly be the final rate increase in the tightening cycle by the Federal Reserve. The inflation numbers have plummeted from a high of 9.1%. However, they are still above the target rate of 2%.