FOMC Meeting: US Central Bank (US Federal Reserve) has announced to increase interest rates by 25 basis points. This decision has been taken in the meeting of US FED on Wednesday. Along with this, the central bank has made it clear that its entire focus will still be on preventing inflation. Apart from this, the Federal Reserve has also indicated that the interest rate may increase one more time by the end of this year.
Explain that the US Fed increased interest rates at a time when the banking sector has been in turmoil after the collapse of Silicon Valley Bank. The Federal Reserve has taken a cautious approach to the banking crisis and has signaled that interest rate hikes are nearing their peak. This means that the hike is expected to end soon.
The Fed has said in its official statement that the US banking system is strong and resilient. Due to the latest incidents, people and companies may have some difficulty in taking loans. Apart from this, its effect can also be seen on inflation, economic activities and hiring. However, the committee is showing a tight stance on the risks associated with inflation.
At the same time, Fed Chairman Jerome Powell said that the fight against inflation is yet to come. Every effort is being made to bring it down to 2 per cent.
Let us tell you that after the increase in interest rates, there was a boom in Wall Street. Analysts were expecting a 0.25% hike in interest rates. The S&P-500 index climbed 0.26% after the Federal Reserve’s announcement. However, during this period the dollar index fell by 0.465% to 102.680.
