The U.S. Federal Reserve yesterday raised its benchmark interest rate for the first time since 2018 as it seeks to tame the highest U.S. inflation in four decades.
The Fed said it decided to raise the target range for the federal funds rate by a quarter of a percentage point from 0.25 to 0.50 percent.
Zhang Yue has the story.
The Fed said that inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures,
adding the Ukraine crisis and related events are likely to "create additional upward pressure" on inflation and weigh on economic activity.
The statement also said the central bank's policymakers expect inflation to remain elevated, ending 2022 at 4.3%, more than double the Fed's 2% annual target.
Most policymakers now see the federal funds rate rising to a range between 1.75% and 2% by the end of 2022,
the equivalent of a quarter-percentage-point rate increase at each of the Fed's six remaining policy meetings this year.
The Nasdaq composite yesterday climbed 3.8%, its biggest gain since November 2020.
Analysts suggest interest rate hikes from the U.S. Federal Reserve are likely to worsen a global debt crisis.
The central banks of Japan and Turkey are expected to start raising interest rates during this week.
According to the International Monetary Fund, some 60% of low-income countries are either in debt distress or at high risk of it.
The Bank of England is set to hike UK interest rates for a third time in a row today.