2023-11-01 20:24:22
The US Federal Reserve (Fed) has decided to leave the key interest rate unchanged again despite the continued high inflation. The interest rate range remains between 5.25 and 5.5 percent, as the central bank in Washington announced. It is the highest interest rate level in 22 years.
More on the topic: US economy
USA: They defy inflation
USA: The fault of the economists
Oil: What no one expects
In order to combat the sharp rise in consumer prices, the central bank has already raised the key interest rate eleven times since March 2022. After ten increases in a row, there was an initial pause in interest rates last June, then an increased increase in July and an unchanged key interest rate again in September. Now the central bank is again aiming for a constant key interest rate.
Key interest rate increases slow down the economy
Inflation in the USA reached a forty-year high of 9.1 percent in June 2022 due to the effects of the corona pandemic and the Russian war of aggression against Ukraine; it was most recently at 3.7 percent. In the long term, the central bank is pursuing an inflation rate of two percent, but does not want to slow down the economy with excessive key interest rate increases. Higher interest rates not only slow price increases, but also consumer spending, which is the mainstay of the US economy.
When making decisions, the Federal Reserve weighs up the risk of inflation and the risk of the economy slowing too much. Higher interest rates slow price increases – but also consumer spending, which is the mainstay of the US economy. Because this makes it more expensive, among other things, to buy houses or cars on credit.
The US Federal Reserve (Fed) has decided to leave the key interest rate unchanged again despite the continued high inflation. The interest rate range remains between 5.25 and 5.5 percent, as the central bank in Washington announced. It is the highest interest rate level in 22 years.
In order to combat the sharp rise in consumer prices, the central bank has already raised the key interest rate eleven times since March 2022. After ten increases in a row, there was an initial pause in interest rates last June, then an increased increase in July and an unchanged key interest rate again in September. Now the central bank is again aiming for a constant key interest rate.
#Federal #Reserve #central #bank #leaves #key #interest #rate #unchanged