The Federal Reserve has decided to increase interest rates by a further 0.25% to 5.25%, the highest it has been in 16 years as it battles higher inflation, but the US central bank also signaled that its rate-raising cycle may be coming to an end.May meeting the Federal Open Market Committee approved the tenth rate rise in just over a year, in what was
Overall, the Committee says it will arrive at future decisions by factoring in the cumulative tightening of monetary policy, and the time lags from the policy moves, and how they eventually affect economic activity, and more importantly, inflation. With just hours to go before the rating announcement, the CME FedWatch Tool, where respondents are asked what they believe the next rate decision will be, revealed that 82.2% expected that there would be a 0.25% rate hike.an overwhelming 96.3% have now said that they expect no hike to be made next monthThe FOMC reiterated its desire to see inflation return to its 2% target, but there was no forecast on when this could be expected to happen., with annualized inflation at 5% in March.
Source: Loan Digest (loandigest.net)
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