US Fed Reserve hikes rates by 25 basis points

With this, the Federal Reserve has hiked interest rates for the second time this year and the seventh time since the normalisation cycle began in 2017.

The United States Federal Reserve, on Wednesday, raised interest rates by 25 basis points. 
 
With this, the Federal Reserve has hiked interest rates for the second time this year and the seventh time since the normalisation cycle began in 2017.
 
It signaled two more hikes this year.
 
"Recent data suggest that growth of household spending has picked up, while business fixed investment has continued to grow strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2 per cent," said Federal Open Market Committee (FOMC).
 
As per Fed Reserve, indicators of longer-term inflation expectations seem balanced.
 
The Committee said it expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labour market conditions and inflation near the 2 per cent over the medium term. 
 
"In view of realized and expected labour market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1.75 to 2 per cent." 
 
“The decision you see today is another sign that the U.S. economy is in great shape,” said Fed Reserve chief Jerome Powell after the two-day policy meeting. 
 
Back home too, the Reserve Bank of India hiked repo rates by 25 basis points for the first time in four-and-a-half years. 
 
Source: Media reports, Fed Reserve press release
 

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