The Federal Reserve has raised interest rates for the sixth time since March, making mortgages and other loans more expensive and increasing the likelihood of a recession.
The Fed hiked its benchmark short-term rate to a range of 3.75 percent to four percent, its highest level in fifteen years. It's the most recent step in the US central bank's battle against inflation, which hit 6.2% in September.
"Today, the FOMC [Federal Open Market Committee] raised our policy interest rate by 75 basis points, and we continue to anticipate that ongoing increases will be appropriate", said Jerome Powell, Federal Reserve Chairman.
"We are moving our policy stance purposefully to a level that will be sufficiently restrictive to return inflation to 2%", he added, while recognising that "we still have some way to go".
Consequently, the cost of borrowing money will continue to grow in the United States and throughout the majority of the world.
However, in a statement released after its most recent policy meeting, the Fed indicated that it would evaluate the cumulative impact of its large rate hikes on the economy, indicating that its policymakers may believe that borrowing costs have risen sufficiently to potentially slow the economy and reduce inflation.
While the U.S. economy continues to expand, successive interest rate hikes pose a risk of recession in 2023, according to economists.
By fLEXI tEAM