Federal Reserve Rate Hike: As was being feared, it has happened and the US Federal Reserve has increased its benchmark interest rates by 0.75 percent. After this, the Federal Reserve’s rates have gone up to the high level of the year 2008. This decision of the Fed has come at a time when there is a threat of recession and fear of recession in the world. Due to this decision of the Fed, the US markets have closed on a strong decline yesterday.
What is the big decision of the Federal Reserve
The Federal Reserve, in its meeting yesterday, raised key short-term rates by 0.75 per cent to a range of 4 per cent from 3.75 per cent. The US Fed has raised interest rates for the fourth time in a row and this is its sixth increase this year.
Tremendous fall in US markets – effect of Fed’s decision
This decision of the US central bank Federal Reserve had a strong negative effect on the US markets and the US stock market fell yesterday. On Wednesday, the American Stock Exchange’s major index Dow Jones closed down 505 points or 1.55 percent at 32147 level. The Nasdaq Composite Index was down 3.36 per cent or 366 points to close at 10524. The S&P 500 index closed down 96.41 percent at 3,759.
What the Federal Reserve Chairman said
Federal Reserve Chairman Jerome Powell said the Fed is not close to ending its rate hike campaign and needs to raise rates a bit more. However, he also said that the Fed can now reduce its interest rate hikes a bit in the future. It may take some more time to balance the inflation rate and the growth rate.
Inflation in America at 40-year high
Inflation in the US is at a 40-year high and the Federal Reserve is also following the formula of tightening rates to reduce it, but this method has proved to be heavy for the US markets yesterday. Yesterday, there was a huge fall in the major stocks in the US markets, in which Tesla’s stock closed down 5.64 percent and Meta’s stock fell by about 5 percent. Amazon’s stock closed on a strong decline of 4.8 percent.
Negative effect can be seen on Indian stock market today
The impact of the Federal Reserve’s decision is seen on the global markets and the Indian market cannot remain untouched. Due to the Fed’s decision on the market trading this morning, it is expected to start with a fall, the rupee may also open with a fall as the dollar starts withdrawing when interest rates rise and the currency of domestic markets including Asian markets starts getting affected. Is.
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