The Federal Reserve, the body of US central banks, has raised the key interest rate in the US for the eighth time in a row. But as expected the rate of increase was further reduced.
The interest rate will be hiked by 25 basis points and the band will be increased from 4.50 to 4.75 percent. In December, the rate hike had already been cut to 50 basis points, after four rate hikes of 75 basis points each. They are necessary to control rising inflation.
Now inflation is past its peak. In December, consumer goods prices were 6.5 percent higher than twelve months ago. This is the lowest level in more than a year. Also, economic growth is slowing down. These are signs that aggressive rate hikes in recent months are paying off.
Still others believe the end of rate hikes is already in sight. After all, the inflation target is 2 percent. Interest rates are expected to remain above 5 percent for some time.
In its interest rate decision, the central bank has announced that the interest rates are going to be increased. Inflation has eased slightly, but remains high.
The European Central Bank (ECB) will also release an interest rate decision on Thursday. An increase of 50 basis points is expected here.
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