On Wednesday, the Federal Reserve unveiled its plan to raise the federal funds rate to 0.75% to 1%. According to Yahoo Finance, the 0.5% hike was “the most aggressive increase made in a single meeting since May 2000.”
In a statement, the Fed noted that “inflation remains elevated,” due to multiple factors, including Russia’s invasion of Ukraine, continuing supply chain disruptions and “higher energy prices and broader price pressures.” In the face of such pressures, the Fed said it “anticipates that ongoing increases in the target range will be appropriate.”
By June 1, in an effort to shrink its balance sheet, the Fed also plans to cut back on its holdings of U.S. Treasury securities, agency debt and agency mortgage-backed securities.
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One Reply to “Federal Reserve Boosts Federal Funds Rate at Increment Not Seen Since 2000”
Perhaps I don’t understand the “New Math”. I always thought that an .5% rate increase from .75% yielded a new rate of 1.25%.
And just how are Fed rate increases going to impact “Russia’s invasion of Ukraine, continuing supply chain disruptions and “higher energy prices and broader price pressures.”?
Our problems, especially in the engergy, are with lack of supply, not increased demand. Too many dollars due to federal government give-away programs have caused prices in general to increase.