#fedratehike

The Federal Reserve has taken extraordinary steps to combat inflation for more than a year, hiking bank lending rates eleven times in total. As a result of the adjustments, many consumer rates have risen.

The rate hikes are designed to curb inflation, and so far they appear to be working.

Inflation update from the Fed

The most recent Consumer Price Index measurement in June revealed 3% inflation. Meanwhile, the Fed’s preferred inflation indicator, the core Personal Consumption Expenditure Index, showed that inflation fell to 4.6%.

Regardless, both percentages are much higher than the Fed’s 2% objective, indicating that the US central bank is hesitant to slow rate rises.

“Despite the euphoria over inflation coming down from 9.1% to 3% in the past year, the trend on core inflation readings — which exclude volatile food and energy components to provide a better read on inflation trends — is much less impressive,” said Greg McBride, the chief financial analyst of Bankrate.com.

“We may be waiting for a protracted period of cooling inflation before we see a halt to interest rate hikes,” added Michele Raneri, the vice president and head of US research and consulting at TransUnion.

The Federal Reserve outlined three ways in which the latest rate rise may benefit or harm the general population on Wednesday…Read More