Rates to touch 2.9% by 2023. Seven more hikes are expected this year.
The Federal Reserve, on Wednesday, announced the sharpest rise in interest rates in over two decades. The move was a bid to combat the soaring inflation in the US.
There was a 0.5 percentage point increase in interest rates. It is a follow-up to the .25 percentage hike in March, the first hike in rates since December 2018. The Fed has increased the interest rate to a target rate range between .75% and 1%.
The Economist Intelligence Unit predicts interest rates to touch 2.9% by 2023, through seven gradual hikes this year. Officials are also planning to cut down their $9trillion asset portfolio which will further aggravate borrowing costs.
The Federal Reserve pointed out that the war in Ukraine and recent lockdowns in Chinese cities created an atmosphere of uncertainty and a disruption in supply chains.
US Fed announces biggest interest rate hike in two decades.
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