Categories: Business

US interest rates increase by 0.75% – the sharpest rise in nearly 30 years | Business News

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The US central bank has increased interest rates by 0.75% to combat inflation – the sharpest hike in 28 years.

The Federal Reserve raised the rate to a range of 1.5% to 1.75%, which has not been seen since before the pandemic began.

The increase will make it costlier for people, businesses and governments to borrow, affecting consumer products like credit cards and mortgages.

The Fed’s chairman, Jerome Powell, had previously ruled out such a high increase but the unexpected increase in inflation – which many had hoped had peaked – forced the bank to change course.

Data published on Friday showed US inflation hit a 40-year high of 8.6% last month, one of the highest in the world.

The news prompted a sharp sell-off in bonds and stocks by investors who anticipated Wednesday’s interest rate rise.

The S&P 500 entered bear market territory on Monday, having fallen 20% from its peak in January.

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