The Federal Reserve is finally stepping in once again to fight inflation and the tumultuous housing market. The Fed raised interest rates by 0.75% on Wednesday, the highest in over two decades. According to the Federal Reserve, this will not be the last interest rate hike in 2022. Americans should expect to see more hikes to calm the borrowing power of Americans and slow down the inflation rate.
The median Fed policymaker anticipates interest rates to rise to around 3.4% by the end of the year, according to economic predictions. This would mean a total rate hike of 1.75%, spread out over the remaining four policy-setting meetings this year.
The Feds hope that introducing higher interest rates could cause interest and inflation to cool down to about 2.6% in 2023. Currently, the inflation rate in the United States is 8.6%. This means that the Feds expect the inflation rate to decrease by 6% in six months by increasing interest rates overall. The end goal, by 2024, is to reduce the inflation rate to a manageable 2%.
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