US Fed delivers third-straight hike, takes interest rate to highest level since 2008
The US Federal Reserve increased its key interest rate by 75 basis points for the third consecutive time in the September Federal Open Market Committee (FOMC) meeting.
PHOTO: Photo of the Federal Reserve Building in Washington DC, USA. Getty Images
Most analysts anticipated a 75-basis point rate hike, while a few predicted a 100-basis point rate increase.
The benchmark policy rate currently ranges from 3-3.25%. Fed officials have signalled to continue the hike until the funds level reaches a "terminal rate," or an end point of 4.6% next year.
The central bank has lowered the growth estimate for 2023 from 1.7% to 1.2%.
Fed Chairman Jerome Powell said his main message has not changed since his speech at the Fed's annual symposium in Wyoming in August, underscoring the central bank remains highly attentive to inflation risk. He reiterated the Fed’s commitment “to bring inflation down to 2%”.
The FOMC will next meet in November.
Asia update: Hong Kong mirrors US, Japan holds ultra-low interest rates
In a move similar to its American counterpart, Hong Kong's central bank raised its benchmark interest rate by 75 basis points to a 14-year high of 3.5%, predicting modest price growth of 2.1%.
Meanwhile, the Bank of Japan (BoJ) held interest rates at ultra-low levels citing the need for an accommodative policy against the backdrop of rising commodity prices and the after-effects of the COVID-19 pandemic.
By Konica Bhatt
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