The Fed raised the rate by 25 bp. – up to 4.5-4.75%
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The US Federal Reserve raised its benchmark interest rate by 25 basis points. Now the rate range is from 4.5% to 4.75% per annum. This is reported in communiqué Federal Open Market Committee (FOMC) following the meeting on February 1. This is the highest base rate since 2007, follows from data Fed.
The Fed said in a statement that the country is experiencing modest growth in spending and production, as well as steady job growth. The unemployment rate remains low. The communiqué also notes that the special operation in Ukraine has led to an increase in “global uncertainty”, including in the economy.
This is the eighth increase in the US key rate since March 2022. The last time it was raised was in December 2022 by 50 bp. Since March, the indicator has risen by a total of 450 bp. Prior to this, the key rate has not been raised since 2018.
In December, price growth in the US slowed down from 7.1% to 6.5%. Core inflation (excluding food and energy prices) was 5.7% in the same month against 6% in November. Meanwhile, inflation remains above the 2% target.
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