WASHINGTON: The Federal Reserve is expected to raise its target interest rate by a quarter of a percentage point on Wednesday , setting aside the rapid hikes used last year to curb a surge in inflation in favor of a more stepwise hunt for a stopping point.
The rate-setting Federal Open Market Committee is due to release its policy statement at 2pm EST . Fed Chair Jerome Powell is scheduled to hold a news conference half an hour later to elaborate on the decision. Caught flat-footed last year as inflation accelerated and threatened to prove far more persistent than anticipated, the Fed approved the fastest interest rate hikes since the 1980s. Starting with a quarter-percentage-point increase in March, the central bank by the summer was raising rates in increments of three-quarters of a percentage point, and all told moved the target policy rate up by 4.25 percentage points in just 10 months.
New data released on Wednesday also showed one closely-watched measure of worker demand remained elevated, with the number of job openings in December rising back above 11 million to a level nearly double the number of people unemployed. The mismatch between the number of open jobs compared to the number of people looking for work is among the main economic imbalances the Fed feels may keep inflation elevated.
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