Continuing an aggressive series of rate hikes since March 2022, the US Federal Reserve (Fed) raised interest rates to the highest level in 22 years with a quarter point increase. The Fed, which increased interest rates for the 11th time today, took an important step in this direction by increasing the policy rate by 25 basis points. Interest rates were increased to 5.25-5.50 percent.
The Fed’s Historically Target Rate LevelAs previously seen in Federal Open Market Committee (FOMC) minutes and CME FedWatch market metrics, there were signals of a 25 basis point increase. Fed Chairman Powell and other Fed officials have recently emphasized that there will be two or more rate hikes this calendar year. However, senior economists from famous investment banks and fund managers from various institutions state that the Fed has started to use the interest rate increase weapon aggressively and that the cycle must be ended after the 25 basis point increase made this evening. In other words, the common voice of the market actors is that the Fed’s rate hike moves have reached a level that will damage economic fundamentals.
