Federal reserve hint for lower key rate hike


Key interest rates in the United States are expected to rise at a slower pace soon. This is stated in the minutes of the last policy meeting of the Federal Reserve, the umbrella of central banks in the USA. The comments in the minutes prepare for a half-percentage point hike in interest rates in December.

Over the past four meetings, interest rates in the US have been raised by 0.75 percentage points over and over again. Higher interest rates are needed to combat soaring inflation. The downside of the large interest rate hikes is their impact on economic growth.

According to a majority of policymakers, a slowdown in the pace would soon be “appropriate”, according to the documents of the meeting of 1 and 2 November published on Wednesday. At the same time, a number of policymakers concluded that the final level of interest rates, in order to reach the target of 2 percent inflation, will be higher than they previously took into account.

Interest rates in the US are now at 3.75 to 4 percent. The last time interest rates soared was in the 1980s.

Since the November meeting, economic data show that there is still moderate growth in the US. A number of data also show signs of declining inflation, with demand for labor still strong. Last month, 261,000 jobs were added and unemployment rose slightly to 3.7 percent, but remained historically very low.

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