This is a first since 1994. The American central bank (Fed), “strongly determined to bring inflation back to its target of 2%”, on Wednesday June 15 raised its key rates by three quarters of a percentage point, i.e. the biggest increase for 28 years, in an attempt to control inflation that is stronger than expected. With this third increase in a row, these rates are now in a range of between 1.5 and 1.75%. The Fed also announced that it expects inflation to be 5.2% this year, against 4.3% projected in March, and will therefore make further hikes at its next meetings in 2022.
At the same time, it anticipates weaker economic growth than expected this year in the United States, at 1.7%, against 2.8% previously. It also expects the unemployment rate to be higher than expected at 3.7%, against 3.5% previously. “General economic activity has rebounded,” after contracting in the first quarter, the Fed noted in a statement after its meeting, citing “robust job gains in recent months and an unemployment rate remaining at a low level.
