[NEWS] – The Fed continues to aggressively raise interest rates by 0.75%

On November 2, the US Federal Reserve (Fed) continued to raise the reference interest rate by 75 basis points, aiming to cool down the 40-year high inflation.

Thus, since the beginning of the year, the Fed has increased interest rates 6 times. In the last 4 times, all raised by 75 basis points, in the sessions of June, July, September, and November. The reference interest rate in the US is currently in the range of 3.75 - 4%. This is the highest level since January 2008.

The decision to raise interest rates yesterday was made after a two-day policy meeting of the Federal Open Market Committee (FOMC) of the Fed. This is the agency’s strongest move since the 1980s, which could affect millions of US businesses and households by pulling lending rates higher. The latest figures show that home loan interest rates in the US are at a nearly 20-year high, leaving the housing market bleak. New home sales fell 10.9% in September compared with August. Compared to the same period last year, the decline was 17.6%.

However, inflation pressure has been somewhat eased. According to the Recruiting Costs Index, wages rose only 1.2% in the third quarter, down from 1.6% in the second quarter. Analysts expect the world’s largest economy to add 200,000 new jobs, down from the previous month, but still at a record high.

The Fed’s announcement also hinted at a policy change, writing that in deciding to raise rates, it will "consider the total amount of monetary tightening, the lag of the impact on economic activity, inflation, the economy and the economy." finance". Economists expect this to be a sign the Fed may cut interest rates by 50 basis points at its meeting next month, and raise less in 2023.

Thanh Long