The rate hike by the Federal Reserve is the sharpest increase since 1980. Reserve Bank will now give its decision on interest rates next week
Fed sharply hikes interest rates
The Federal Reserve has increased key rates sharply to control inflation. America’s central bank has announced a 0.75 percent hike in key rates. The Fed has raised interest rates for the second consecutive month. fed So far in June and July, it has increased rates by 1.5 percent, which is the fastest increase since 1980. This move of the central bank will help in controlling inflation, although economic growth may also have a bad effect. After the Fed, now the eyes of domestic investors will be on the Reserve Bank, which will announce the policy review next week.
no recession expected
Giving information about the decision, Federal Reserve Chief Jerome Powell said that at present there is no sign of slowdown in the economy. According to him, unemployment is still at the low levels of 5 decades and income is also showing an increase. In such a situation, at present there is no sign of slowdown in the economy. According to him, the biggest concern at the moment is the inflation rate, so the central bank’s policies are focused on controlling inflation. Before today’s increase, the Fed also increased rates in March, May and June. With these three gains, the short-term interest rates have come down from the level of almost zero to 2.25-2.5 percent.
What can be the attitude of the Reserve Bank
After the expected increase in rates by the Federal Reserve, investors are now eyeing the Reserve Bank’s stance and it is believed that the Reserve Bank may also increase rates next week. BofA Security has estimated that the Reserve Bank may increase rates by 0.35 percent. American brokerage estimates that given the current conditions, the repo rates may see an increase of 0.35 percent. The Monetary Policy Committee of the Reserve Bank will announce the results of the meeting on August 5. Earlier, in two consecutive months, the Reserve Bank had increased the rates by 0.9 percent overall. The brokerage house has given an estimate that the Reserve Bank may continue to hike rates according to the conditions.