Fed announces three quarters percentage-point rate hike to control inflation
Source: Washington Post
The Federal Reserve on Wednesday hiked interest rates by three quarters of a percentage point, its most aggressive move yet to try to control inflation, as it squeezes the U.S. economy.
For weeks, Fed leaders set expectations for an increase of half a percentage point, as it did in May, in the latest of seven rate increases slated for this year. But a surprisingly bleak inflation report released last week, the war in Ukraine plus growing signs that the markets and American public have lost faith in the Fed, ignited a more forceful push from central bank policymakers as they wrapped up two days of meetings. The Fed has not enacted a hike of this size since 1994, but signaled similarly-large hikes are coming later this year.
The invasion of Ukraine by Russia is causing tremendous human and economic hardship, according to a statement released by Fed policymakers at the conclusion of the Fed's two-day policy meeting. "The invasion and related events are creating additional upward pressure on inflation and are weighing on global economic activity. In addition, covid-related lockdowns in China are likely to exacerbate supply chain disruptions.
The Fed added that it expects ongoing increases of three quarters of a percentage point will be appropriate, though it is unclear exactly how many, or at which meetings the Fed will implement them. (Kansas City Fed President Esther George voted against the rate decision, preferring a small hike of half a percentage point.)
Read more: https://www.washingtonpost.com/us-policy/2022/06/15/fed-rate-hike-inflation/
BComplex
(8,046 posts)Or food suppliers bilking US consumers? So they're going to cover for the grifters by not calling it what it is?
Well, what else is new?
Tadpole Raisin
(972 posts)Whining over high rates. They should have lived through the 70s!
And what did Biden have to deal with? Oh, only a once in a hundred year pandemic, ending the Afghan war, Russia invading Ukraine while stopping Ukraine shipments of food and oil manipulation by corporations plus political corruption that makes Watergate look like a slumber party.
Thats all.
brooklynite
(94,503 posts)No car loans. No credit card debts.
bhikkhu
(10,715 posts)...as after an inflationary stretch, if you had held debt at a reasonable interest rate you could then pay it off with depreciated money instead of full-price money. For instance, my mom bought a house in 1974 for $25k, then ten years of inflation pushed the value to $125k. By which time her income (indexed to inflation) was also so much higher that the mortgage payment was almost trivial. It went from being about half of her paycheck to about 1/5th of her paycheck.
Though with that said, I don't have any debt either. It's not worth the trouble and predicting things like that has never worked out well for me.
progree
(10,901 posts)raised interest rates by 0.75% to a range of 1.50% to 1.75%
https://finance.yahoo.com/news/fed-fomc-monetary-policy-decision-june-2022-120337242.html
... The median Fed policymaker now expects prices to rise by 5.2%, as measured by personal consumption expenditures (PCE), over the course of 2022
... the median member of the committee expects to see the pace of headline price increases to cool to 2.6% next year. These forecasts suggest inflation could further in 2024 to 2.2%, much closer to the Feds 2% target.
... The central bank also downgraded expectations on other key economic measures, expecting the U.S. economy to grow by only 1.7% this year, compared to the 2.8% it had forecast in March. ((Remember that Q1 GDP was -1.5% annualized rate, in their 2nd estimate)).
As of 227p ET -- stocks, which were up for the day, dipped some right after the announcement, but were still in positive territory. Then they quickly got back to almost to where they were before the announcement. S&P 500 currently 3765, up from yesterday's 3735 close. 3765 is down 22.1% from the Jan 3 all-time high, so it's still in bear territory, which begins at 3838 ("Munich Munich" ) since the Munich conference and Neville Chamberlain and "peace in our time" occurred in 1938. (3838 is 20% down from the 4797 all-time closing high of January 3).
bucolic_frolic
(43,137 posts)Powell and Biden's recent meeting is producing results. Do what needs to be done, and be more transparent about the reasons for it so as to minimize political fallout.
Make sense based on what's happening?
newdayneeded
(1,955 posts)Will interest rates finally start rising for savings accounts now?
BumRushDaShow
(128,877 posts)But it will be minuscule I'm sure, at least to start.
I suppose one might look at the bond market to see which way some of these folks think things will be going.
I chuckle about still having a $100 EE bond from 1989 and I think they were supposedly paying ~6% interest annually. Of course the EEs are long gone and discontinued but my little guy sits upstairs anyway...
durablend
(7,460 posts)As for B&M banks, don't hold your breath.
IronLionZion
(45,431 posts)many banks have both. The online rate will be higher. Ask them for the rates tomorrow or check their website.
Online banking is pretty easy but some folks will keep an online bank for savings and a traditional bank for checking.
You can also check sites like this to compare:
https://www.bankrate.com/banking/savings/rates/#bankrate-savings-account-guide