Andrew
With the Federal Reserve expected to hike its key interest rate by three-quarters of a percentage point on Wednesday to battle high inflation, focus will shift to how deeply signs of an economic slowdown have registered with its policymakers.
The anticipated increase in the target federal funds rate, the Fed’s key tool in trying to lower inflation from a four-decade high, will bring the U.S. central bank to a mile marker of sorts as it reaches a level of around 2.4 percent that is estimated to no longer encourage economic activity.
That will represent one of the fastest-ever gear changes in U.S. monetary policy – just over four months ago the policy rate was near zero and the Fed was buying billions of dollars of bonds each month to help the economy recover from the COVID-19 pandemic. – Reuters
Online Reporter