Federal Reserve officials announced Wednesday that the Federal Reserve will raise interest rates by 0.75 percent to combat inflation.
As the interest rates for loans will go up, this increase is designed to discourage people borrowing money. According to them, if people borrow less money, inflation will fall. In June, it was 9.1 percent.
According to The New York Post, there are some who believe the increase in the minimum interest rate can help to create recession.
In a statement the governing body made these words:
Recent indicators of consumption and production have shown a decrease. However, recent job gains were robust and unemployment has remained at a low level. The high inflation rate is due to supply and demand issues, increased food and energy costs, as well as wider price pressures, remains significant.
Russia’s war against Ukraine is causing tremendous human and economic hardship. Inflation is being impacted by the conflict and other related events. The Committee pays close attention to the risks of inflation.
In order to maximize employment and maintain inflation rates of 2 percent for the long-term, the Committee aims to do so. The Committee has decided to increase the range of federal funds rates from 2-1/4 percent to 2-1/2% in support of those goals. It anticipates that there will continue to be increases to the range. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet that were issued in May. It is determined to return inflation to the 2 percent target.
RedState will continue to provide updates as this information is released.
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