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| Photo Credit: AP. |
The Federal Reserve Wednesday hiked the nation’s interest rate by three-quarters of a percent in a bid to stem soaring inflation, increasing fears of possible recession. U.S. inflation is now running at a 41-year high
The central
bank’s open market committee said it is weighing a variety of conflicting
economic data, The Washington Times reports.
“Recent
indicators of spending and production have softened,” the Fed said in a
statement. “Nonetheless, job gains have been robust in recent months, and the
unemployment rate has remained low. Inflation remains elevated, reflecting
supply and demand imbalances related to the pandemic, higher food and energy
prices, and broader price pressures.”
It said
Russia’s war against Ukraine “is causing tremendous human and economic
hardship,” according to The Associated Press.
“The war and
related events are creating additional upward pressure on inflation and are
weighing on global economic activity,” it said.
The Fed
noted that ongoing increases in its target range “will be appropriate” in the
months ahead.
Such hikes
in interest rates would result in increases in rates for home mortgages and
other consumer loans, according to The Washington Times.
U.S. inflation figures continues to soar
U.S.
inflation figures released early July rose to about 11.3% as measured by
producer wholesale prices for the month of June 2022, according to a report
from the Bureau of Labor Statistics.
The report
came a day after headline inflation measured by the consumer price index rose
to 9.1% for the 12 months ending in June, the highest level since 1981,
Washington Examiner reported.
The Federal
Reserve is struggling to control skyrocketing inflation by further raising
interest rates after raising rates three times since the beginning of the year.
The Producer
Price Index (PPI) determines the wholesale prices of goods.
In June, the
central bank hiked its interest rate target by three-fourths of a percentage
point for the first time since 1994 as against the quarter of a percentage
point, or 25 basis points that is typical of the Fed.