US interest rates hit highest levels in 22 years
Federal Reserve chair Jerome Powell hinted at further rises, adding that there was a “long way to go” before inflation might be completely vanquished.
This marks the 11th increase since 2022 and comes as the US central bank continues to try and stabilise prices and cool its economy.
US stock markets rose after the latest meeting on Wednesday (26 July), in which chair Jerome Powell said policymakers had covered «a lot of ground» after raising rates from near-zero starting last year.
However, he hinted at further rises, adding that there was a «long way to go» before inflation might be completely vanquished.
«We are going to be going meeting by meeting,» he said. «It is certainly possible that we would raise the funds rate again at the September meeting if the data warranted. And I would also say it is possible that we would choose to hold steady.»
US inflation falls below expectations to 3% in June
The decision has come ahead of central bank meetings in both Europe and Japan.
In the UK, where inflation was last recorded at 7.9%, the Bank of England is expected to raise its key rate at its next meeting on 3 August from the current 5%.
Consumers, who are still feeling the crunch from the pandemic and rising energy prices have hit been hit further by the moves in the form of expensive mortgages, business expansions and other activity.
Economists say the hike was not a shock and that the real concern is about what happens next.
Anna Stupnytska, global macro economist at Fidelity International, said: «The key question going into the meeting was around the messaging Powell would choose to send about further tightening.
»The ‘careful pace' of tightening he talked about in June had been taken to mean hiking at every other
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