Fed Increases Rates <br />By Half a Percentage Point, , Biggest Hike Since 2000.<br />Chairman of the Federal Reserve Jerome Powell announced the half point interest rate hike on May 4.<br />He stated that Powell the hike is a response to inflation, which "is much too high” and the action is an attempt to "expeditiously to bring it back down.”.<br />Powell also signaled that further increases in interest rates could be on the horizon.<br />There is a broad sense on the committee that additional 50 basis point increases should be on the table at the next couple <br />of meetings, Jerome H. Powell, Fed Chair, <br />via 'The New York Times'.<br />The Federal Open Market Committee statement cited “lockdowns in China" and the war in Ukraine as further strains to the supply chain.<br />[These and other] related events are creating additional upward pressure on inflation and are likely to weigh on economic activity, Federal Open Market Committee Statement, <br />via 'The New York Times'.<br />Because of the global situation, the Fed reiterated its close monitoring of the U.S. economy and inflation. .<br />The committee is highly attentive to inflation risks, Federal Open Market Committee Statement, <br />via 'The New York Times'.<br />Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures, Federal Open Market Committee Statement, <br />via 'The New York Times'.<br />Take the time to understand each other.<br />Some analysts have predicted rate increases as high as three-quarters of a percent.<br />According to Powell, an increase of that size is “not something the committee is actively considering.”.<br />What they are trying to do is tell the market — inflation could be higher in the near term, Gennadiy Goldberg, TD Securities, <br />via 'The New York Times'.<br />Powell expressed that he does see a way forward.<br />I do expect that this will be very challenging, it’s not going to be easy. [But] I think we have a <br />good chance to have a soft or <br />soft-ish landing, Jerome H. Powell, Fed Chair, <br />via 'The New York Times'
