PanamaTimes

Wednesday, Jan 15, 2025

US interest rates see second 0.75 point rise to tackle inflation

US interest rates see second 0.75 point rise to tackle inflation

The Federal Reserve said it expects that "ongoing increases" will be needed despite evidence of a slowing economy.
The US central bank has raised interest rates by 0.75 percentage points for the second time in a row in an attempt to curb soaring inflation.

The US Federal Reserve said it expects that "ongoing increases" will be needed despite evidence of a slowing economy and concerns that aggressive hikes could lead to a recession.

After four increases this year, the benchmark rate now stands at a range of 2.25% to 2.5%, levels that have not been seen since 2018.

This will make it costlier for people, businesses and governments to borrow - affecting credit card and mortgage payments.

The Fed's last hike was the sharpest since 1994 and reflects efforts to control inflation, which has risen to 9.1% in the past year - the fastest increase in 40 years.

Officials said that while job gains have remained "robust" and unemployment is low, recent indicators of spending and production have "softened", suggesting that rate hikes are starting to bite.

"While another unusually large increase could be appropriate at our next meeting that is a decision that will depend on the data we get between now and then," Fed chair Jerome Powell said.

He also acknowledged that the pace of rate hikes could slow down at some point.

"As the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases while we assess how our cumulative policy adjustments are affecting the economy and inflation," he said.

The Fed has implemented much sharper rate hikes than its UK counterpart, the Bank of England, which has favoured more modest hikes of 0.25 percentage points.

There is speculation that the Bank could change course when it meets next week to decide on the next increase, but a recent poll of economists by Reuters shows that most still think it will shy away from a 0.5 point rise. In the UK, interest rates have reached 1.25%.

Last week the European Central Bank raised rates from -0.5% to 0%.
Newsletter

Related Articles

PanamaTimes
0:00
0:00
Close
California Wildfires Set to Become Costliest in U.S. History
Chief Justice Roberts Warns Against Threats to Judicial Independence
Generation Z Faces Scrutiny Over Workplace Readiness
Democrats Call on Biden to Protect Controversial Temporary Protected Status Program
Trinidad and Tobago Declares State of Emergency as Murder Rates Surge
Migrant Children Abandoned at U.S.-Mexico Border
The Closure of the Global Engagement Center: Controversy, Claims, and Conclusions
The American Democrats Party Strives to Rise from the Ashes
Trump Nominates Kevin Marino Cabrera as Ambassador to Panama Amid Canal Dispute
Texas Congresswoman Kay Granger Located in Nursing Home Following Six Months of Inactivity
A large group of unauthorized migrants is traveling through Mexico with the aim of reaching the USA before Trump assumes office.
A Democrat Congresswoman with blue and black hair is having a breakdown over "President Musk."
Argentina Defies Predictions with Record $17 Billion Trade Surplus, But Is the Growth Sustainable?
Disney's High Seas Gamble: Navigating the Waters of Cruise Expansion
The Surprising Impact of Extreme Heat on Mexico's Youth
Polarization: The Word That Unites a Divided Era
Exoneration in the Subway: The Complexities of Self-Defense and Public Safety
The Tragic Passing of UnitedHealthcare CEO Highlights Corporate Security Challenges
Global Developments: Violence in Sinaloa, Political Chaos in the Bahamas, Venezuelan Voting Disputes, and a Major UK Drug Bust
OpenAI and Anduril: Charting AI's Path in Modern Warfare
The Pardon of Hunter Biden: A Symbol of Hypocrisy
Biden Crafted the Strategy Used by Trump
South Korea's Democracy Tested: President Yoon’s Martial Law Reversal Sparks Political Reckoning
Seoul Crisis: Yoon Suk Yeol's Martial Law Blunder Triggers Political Upheaval
Generative AI's Limited Impact on Elections Highlighted by Meta
France at the Precipice: Barnier’s Administration Confronts Unprecedented No-Confidence Vote
Jaguar Unveils Electric Concept Car, Type 00
White House Defends Presidential Pardon of Hunter Biden
xAI by Elon Musk: Transforming Ambition with a $50 Billion Valuation
President-elect Donald Trump, has announced on Truth Social that Kashyap "Kash" Patel, will be the next Director of the FBI
A Historic Milestone or Risky Precedent? The Assisted Dying Bill Splits both Parliament and the Nation in England and Wales
Trump's Tariff Threat Looms Large as Trudeau Heads to Mar-a-Lago for Talks
Canada's Oil Industry Faces Uncertainty Amidst Trump's Tariff Threat
World Court to Assess Global Legal Responsibilities on Climate Change
What the Pink Elephant Test Reveals About Thought Control
Trudeau Visits Trump in Florida Amid Rising Tariff Concerns
Is Elon Musk the Unofficial President of America?
Impact of Proposed US Tariffs on Canadian Oil Exports
U.S. policymakers face a contentious debate over whether to engage with Nicolás Maduro's regime in Venezuela.
COP29's Carbon Trading Deal Faces Major Criticisms
Indian Diplomats in Canada Monitored: Government Raises Alarm
Putin Warns Trump of Ongoing Safety Concerns
Claudia Sheinbaum Challenges Trump's Migration Claims
Insights from Dostoevsky: The Impact of Self-Deception
Trump Administration Nominees Face Threats, FBI Confirms
Elon Musk Criticizes Fighter Jets, Advocates for Drone Warfare
Kim Kardashian's Social Media Activity Fuels Political Speculation
An Examination of AI's Influence on Future Work and Life
Tulsi Gabbard's Contentious Nomination for Director of National Intelligence
$100,000 Trump Watch Faces Slow Sales
×