The Federal Reserve of the United States (US) has raised interest rates for the first time in over 30 years, intensifying its fight against rising consumer costs.
The Federal Reserve announced that its main interest rates would be raised by three-quarters of a percentage point, to a range of 1.5 percent to 1.75 percent.
The increase, which is the third since March, comes amid unusually high inflation in the United States last month.
More hikes are predicted, adding to the economy’s uncertainties.
Officials predict the rate at which the FED charges banks to borrow to reach 3.4 percent by the end of the year, with the effects reverberating through the public in the form of higher borrowing rates for mortgages, credit cards, and other loans.
As central banks all around the world follow suit, the global economy will undergo a significant shift, after years of low borrowing costs for firms and people.
“Most advanced economy central banks and some emerging market central banks are tightening policy in sync,” said Gregory Daco, chief economist at strategic consultancy firm EY-Parthenon.
“That is a global environment that we’ve not been accustomed to in the past few decades, and that will represent ramifications for the business sector and for consumers throughout the world.”
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