The United States Federal Reserve (Fed) announced yesterday a increase in the official interest rate of 0.75 pointsthe largest increase in 28 years, to fight runaway inflation.
With this increase, which is the third since the Fed started raising rates in March, The official interest rate of the largest economy in the world is now within a range of between 1.5% and 1.75%.
In an official statement at the end of their two-day meeting, the Board of Governors of the The Federal Reserve also announced that it expects to carry out more rate hikes in the future. This is the largest rate hike since 1994, when Democrat Bill Clinton was in charge of the White House and the Fed was led by the historic Alan Greenspan.
The Fed announced that it will continue to reduce its US government public debt portfolio, which is made up mainly of Treasury bills and mortgage-backed securities.
Nowadays, the central bank accumulates about $9 trillion in US debt.As it did in June, the Fed will sell off $30 billion in Treasury bills and $17.5 billion in mortgage-backed securities each month in July and August.
Starting in September, these monthly figures will rise to $60 billion and $35 billion respectively.and the process will end when levels considered “slightly above” what the bank considers “ample reserves” are reached.
Last Friday it became known that inflation in the United States shot up in May to its highest rate in the last 40 years, 8.6%, a new escalation in consumer prices driven above all by the sharp increase in energy prices.