The Clap The Federal Reserve has raised interest rates by 0.75%, the biggest increase since 1994.
The deets While a 0.5% hike was expected up until May 2022 inflation figures came out, many quickly shifted their expectations toward a 0.75% hike. Fed Chair Jerome Powell said a 0.75% rate hike is not & will not be common, but is a possibility for the next meeting at the end of July. Interest rates are forecast to reach 3.4% by the end of 2022.
Why this matters With several companies laying off employees, & high prices taking a heavy toll on consumers, concerns of a recession are looming larger & larger. With inflation set to be the biggest talk of the upcoming U.S. presidential midterm elections in November, President Joe Biden’s re-election hopes will be tested to the limits. It’s worth noting that several of the past one-term U.S. Presidents never saw a second term due to fears of a recession at the time.