50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

US Fed Raises Interest Rate by 0.5%; No Reduction till 2024

Published 12/18/2022, 05:07 PM
Updated 12/18/2022, 05:15 PM
US Fed Raises Interest Rate by 0.5%; No Reduction till 2024

  • The US Fed Reserve hiked interest rates by 0.5%.
  • The expected terminal rate for 2023 is 5.1%, higher than the 4.6% estimated in November.
  • It has been indicated that there is little chance of a reduction in rates in the coming years.

The US Federal Reserve raised the interest rates by 0.5% on Wednesday, indicating the highest level in 15 years. Along with the hike in the interest rates, Fed Chairman Jerome Powell and the other officials forecasted the interest rates of the next year which are expected to be higher, with no reductions till 2024.

Significantly, the Federal Open Market Committee (FOMC) calculated the “terminal rate”, a point at which the interest rate is expected to reach, by analyzing the “dot plot” of individual members’ expectations. Out of 19 dots, 17 showed that the interest rate would go beyond 5% in 2023.

Thus, as per the analysis, the expected terminal rate was 5.1%, which is equivalent to a target rate of 5% – 5.25%, a rate that is much higher than the 4.6% forecasted in November.

Subsequently, the Chinese reporter Colin Wu, tweeted on his Twitter account Wu Blockchain, that the Fed’s estimation of the higher interest rates and the unemployment rate at the end of next year suggests the Fed’s understanding of the entrenched inflation:

The post US Fed Raises Interest Rate by 0.5%; No Reduction till 2024 appeared first on Coin Edition.

Read more on Coin Edition

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.