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The Federal Reserve raised interest rates by three-quarters of a percentage point on Wednesday, an aggressive move to tackle inflation that is crushing the economy, frustrating consumers and ‘choking’ the Biden administration.
This today is the largest rate hike since 1994 and will affect millions of American businesses and households, increasing the cost of borrowing for homes, cars and other loans in order to force a slowdown in the economy.
Until this week, economists and investors expected the Fed to raise the key interest rate by half a point, the second such move in 22 years. However, after a non-promising inflation report on Friday revealed that price increases are expanding across the economy, expectations were raised for a more dramatic rate hike.
Americans are struggling with rising costs from the grocery store to gas stations and the Fed is mandated with the task of keeping prices stable. Rising prices on everything from food to gas, which has hit a record daily high over the past month, has led to the lowest consumer sentiment since 1952.
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