Federal Reserve Raises Interest Rates Another 50 BPS

Joshua Ramos
Government of China Tried To Obtain Internal Info From Federal Reserve: Report
Source: Investopedia

The trend continues, as the Federal Reserve has raised interest rates by another 50 BPS today. Jerome Powell had already signaled that the Fed was planning to slow hikes this month, while they remain pushing rates in the final meeting of the year.

November saw the Federal Reserve raise interest rates by a 0.75 percentage point, which was the fourth-consecutive hike since May. Yet, this hike of 0.50 of a percentage point marks a marginal difference that keeps it from a fifth-consecutive month.

Fed Raises Interest Rates Yet Again.

It has been the most aggressive economic tightening in 30 years, and it continues today. The news of the Federal Reserve raising interest rates another 50 basis points has come following signaling that an ease could be coming.

When the Fed increased interest rates in November, it marked the highest borrowing cost since the Great Recession. Moreover, the move was done to aid in combatting the nation’s rising inflation. Subsequently, another raise has only increased that number.

Jerome Powell Says
Source: Pexels

That same meeting in November saw the Fed raise interest rates to a target range of 3.75%- 4%. Conversely, that number remains at the highest level since the beginning of 2008. It seems as though this interest rate rise, noting the first decrease from 75 bps since May, notes a marginal improvement.

The November meeting saw an optimistic Fed precede this development. They acknowledged “the lags with which monetary policy affects economic activity,” in accounting for the pace of the increase that was implemented today.

Federal Reserve
Source: Pixabay

That last meeting also saw Fed Chair Jerome Powell signal that a decrease in increases would come. Hence, the 50 bps has come to fruition, justifying that very sentiment. Additionally, this Dec 14 meeting marks their final of the year.