The predictions came true:
tonight the central bank of the USA raised the interest rate by 0.5% to a range of 4.25%-4.5%. The step was made after four consecutive increases during which the interest rate increased by a sharp rate of 0.75%.
The increase tonight is intended to curb inflation in the US which, although it has started to moderate in recent months, but still remains high. According to the data published last night, inflation in the US is surprisingly downward.
The consumer price index rose by 0.1 percent in November against an expected 0.3 percent.
Thus, the index completed an increase of 7.1 percent per year compared to November 2021.
This is a moderation in the annual inflation rate from the rate measured in October - 7.7 percent.
Let's recall that just last June inflation in the US reached a record level since the 1980s and stood at 9.1 percent.
The Federal Bank's announcement states that "inflation remains high. It reflects an imbalance in supply and demand following the pandemic and leads to an increase in food and energy prices. Russia's war against Ukraine is also causing tremendous economic distress. The war and the accompanying events contribute to upward pressure on inflation and weigh on global economic activity. The committee is very attentive to the risks of inflation."
The inflation rate is expected to moderate (for illustration), photo: Dodo Greenspan
The Fed anticipates continued interest rate hikes and has announced that there may be "continued interest rate hikes" in order to return inflation to the 2 percent target.
The committee anticipates that continuous increases will be appropriate in order to reach a position of monetary policy in which inflation stands at 2 percent over time," reads a statement on their behalf.
It should be noted that even in the interest rate decisions made by the world's central banks recently, a slowdown in the rate of interest rate increases is already evident.
Canada raised interest rates by 0.5 percent for the second time after increases at a rate of 0.75 percent.
India increased by 0.35% after 0.5%.
Australia raised interest rates for the third time by 0.25% and Chile and Poland did not change interest rates at all.
We will remind you that the decision on the interest rate in Israel will be announced on January 2 and will be largely influenced by the American interest rate as well as the inflation data in Israel which will be published tomorrow afternoon.
Currently, the forecasts are divided and expect the interest rate increase to range between a quarter of a percent and a more aggressive increase of half a percent.
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