Regardless of current trends, the Federal Reserve will implement additional interest rate hikes to correct the strain the average consumer still feels on the economy.

The US Federal Reserve has raised interest rates by 25 basis points (0.25%) through the Open Market Committee (FOMC). The rate hike was as expected and was implemented despite recent bank failures triggering a credit crisis in the financial sector.

The days leading up to the FOMC policy meeting were filled with a lot of speculation by economists and analysts highlighting which way the Fed would go based on current realities. Banking crises require a quick fix by the Fed’s monetary policy, but the adoption of a 25 basis point rate hike confirms that the Fed is currently choosing economic development over bank disruption.

The rate hike comes just one year after the Fed started raising rates, during which time very high inflation reached its highest level in 40 years. Rate hikes, introduced about nine times, only recently started to have an effect. However, differences in inflation rates remain a major concern as Americans grapple with the high cost of living across the board.

Whether or not the Federal Reserve pundit suspends interest rates doesn’t make much of a difference given how dire the situation is at the moment.

“They are right to feel that the economy is in dire times.” Said Thomas Philipson, a professor of public policy studies at the University of Chicago and former acting chairman of the White House Council of Economic Advisers, noted that the current inflation crisis has weakened the dollar’s purchasing power in general.

Inflation is still pegged at around 5.4%, according to the Federal Reserve’s favorite measure, significantly higher than its benchmark target of 2%.

Are interest rate hikes over?

The US Federal Reserve’s current actions regarding the planned interest rate hike by no means mean the end of that hawkish move. There is the poignant fact that Americans are paying more for goods and services, suggesting that there is systemic inflation that must be addressed across the board.

Since rate hikes began, credit card related rates have been directly correlated with Fed Fund rates, rising by at least 20%. This rate for credit cards is a record high (ATH) as it is up from 16.34% recorded in the same period last year.

In addition to credit cards, mortgage interest rates are currently pegged at an average of 6.66%. This also means that prospective homebuyers have lost considerable purchasing power over the past year.

Regardless of current trends, the Federal Reserve will implement additional interest rate hikes to correct the strain the average consumer still feels on the economy. according to At least three more rate hikes are underway in May, June and July, according to analysts at Goldman Sachs Group (NYSE: GS).

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Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalist who enjoys writing about real-world applications and innovations in blockchain technology, driving general acceptance and global integration of emerging technologies. His desire to educate people about cryptocurrencies has inspired his contributions to famous blockchain-based media and sites. Benjamin Godfrey loves sports and farming.

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