The Fed raises rate by 75 basis points in its fight against inflation
El Financiero | June 15, 2022 |

The Federal Reserve of the United States (Fed) decided to raise the interest rate of the Federal Funds by 75 basis points this Wednesday, with this, the reference is located in the range of 1.5 to 1.75 percent, from 0.75 to 1 percent previously.

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This is the first time since November 1994 that the Fed has raised the rate by this magnitude, however, the market had already discounted this increase after May inflation data was released last week.

In May, consumer prices rose 8.6 percent at the annual rate in the American Union, which represented their greatest advance in 41 years.

Jerome Powell, president of the Fed, had already anticipated that the organism would act in a more forceful way to mitigate the inflationary pressures seen recently.

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Given this complex inflationary panorama, several analysis groups expect the interest rate in the United States to close above 3 percent in 2022.

“We now expect the Fed to raise interest rates to 3 percent for 4Q22 and 3.5 percent for 1Q23, i.e. above its neutral rate estimates and therefore to a restrictive stance” , indicated analysts from the rating agency Fitch Ratings.

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