By John Meyer, consultant in financial markets, for Eurasia Business News, July 28, 2022

The U.S. Federal Reserve again raised the key rate during his meeting on July 27, bringing it to the range of 2.25-2.5% per annum.

The Federal Open Market Committee of the US Federal Reserve raised the key rate by another 0.75 percentage points to the level of 2.25-2.5%. The same increase was at the end of the meeting in June. In general, the tightening of the Fed’s policy on rates began in March, in May, the regulator also announced the beginning of a reduction in the volume of assets on the balance sheet from June 1, 2022.

Read also : Gold, inflation and monetary policies

Last June the increase was a “non-standard” 0.75 percentage points. Explaining its decision, the U.S. central bank, as before, referred to the growth of inflation in the U.S., which hit record 9.1% in June. The previous optimistic tone of the description of the state of the U.S. economy in the Fed’s statement was replaced by a more cautious one. Experts still differ in assessing the risk of the U.S. entering a recession, expecting the preservation of economic growth in the second quarter. The IMF does not exclude that the recession may begin later – against the background of a slowdown in the U.S. GDP growth.

The IMF chief economist Pierre-Olivier Gourincha did not rule out a recession in the United States :

Given the current conditions, the likelihood that the US economy will be able to avoid a recession is actually quite small. For the U.S., the growth rate, according to quarterly estimates, in 2023 will be only 0.6%, so a small shock at this stage may be enough to push the US economy from a fairly low growth rate into recession. ” 

Thank you for being among our readers.

Our community already has nearly 65,000 followers !

Sign up to receive our latest articles, it’s free !

Support us by sharing our posts !

Follow us on Facebook and Twitter

© Copyright 2022 – Eurasia Business News