May 4, 2022
The central bank raised its benchmark rate by half-a-percentage point, following a quarter-point increase in March. The moves mark a sharp U-turn from the easy-money policies the Fed had pursued through most of the pandemic. The Dow Jones Industrial Average soared more than 900 points, while both the S&P 500 index and the Nasdaq rose about 3%.Fed’s preferred inflation yardstick
A person pulls out a gallon of milk as people shop at a grocery store in Monterey Park, Calif, on April 12. Prices for groceries and other consumer goods have continued to surge.The Fed hopes to cool off demand by making it more expensive to borrow money. But interest rates are still low by historical standards, so the central bank will likely have to move aggressively to catch up, with another half-point increase expected at the next Fed meeting in June.
“I think we have a good chance to have a soft — or ‘softish’ — landing,” Powell said, noting that families and businesses have amassed significant extra savings during the pandemic. “Businesses are in good financial shape. The labor market is very, very strong. And so it doesn’t seem to be anywhere close to a downturn.”