Us Federal Reserve Raises Target Interest Rate By 25 Bps

Top Stories

Company

L&T Partners with PS Technology to Revolutionise Railways

6 mins read. August 2, 2024 at 12:45 PM

Company

Jindal Saw Q1 FY24 PAT Rises 67% to Rs 441 Cr

4 mins read. August 2, 2024 at 12:41 PM

Company

Pfizer Q1 FY25 PAT Zooms 61% to Rs 151 Cr

4 mins read. August 2, 2024 at 12:36 PM

Stock chart

US Federal Reserve raises target interest rate by 25 bps

ri-calendar-2-lineFeb 2, 2023

By: BlinkX Research Team

FbkFbkTwitterTelegram

The US Federal Reserve (central bank of the United States) decided to increase the target interest rate by a mere 25 basis points. It may be recollected that earlier they had hiked rates by 75 bps on four occasions and then raised by just 50 bps in December. In February, they the rate hike is just 25 bps as evident from the Fed minutes. But the Fed is not done with rate hikes yet.

 

US inflation had crossed 8% last year before it tapered lower. While the Fed has been continuously raising Interest rates the inflation has continued to be sticky. One reason could be that the labour market is still very buoyant and so the rate hikes are not being transmitted into lower inflation. Fed stated that although inflation had eased, it still remains elevated and battle far from over.

 

To a large extent, these are the headwinds of the Russia-Ukraine war in the aftermath of the COVID pandemic. The revenge demand from a lot of helicopter money and the oil crisis caused by the war pushed up inflation to levels last seen in the US in the early 1980s. Government had provided a lot of benefits to people like near-zero interest rates which spurred demand. Also, the Just in Time (JIT) supply chain created a global embarrassment.

 

It was not just the war but also the sanctions that led to higher inflation. Even as the Fed has been relentless in its pursuit of inflation, there are now concerns that the global market may dip into recession this year due to weak demand caused by steep interest rates. On the positive side, the US has seen reduction in inflation, albeit gradual. This could impel the RBI to also stay on the hawkish side.

Related News

News Thumbnail
Market

SEBI Launches Version Beta of Settlement Calculator

2 mins read. June 3, 2024 at 05:53 AM

News Thumbnail
Market

NSE Arm NSE Indices Launches India’s First EV Index

3 mins read. May 31, 2024 at 01:14 PM

News Thumbnail
Market

RBI Bars Edelweiss ARC from Acquiring Financial Asset

2 mins read. May 31, 2024 at 09:33 AM

News Thumbnail
Market

RBI Launches G-Secs App, PRAVAAH Portal, FinTech Repository

3 mins read. May 31, 2024 at 04:52 AM

Related Blogs

Stock chartDemat Account

Biggest Winners and Losers in MSCI: Key Movers in Global Indices 2025

0 people read

3 mins read . Aug 20, 2025

Stock chartMutual Fund

What MF Big Boys Bought and Sold – Top Mutual Fund Stock Activity in 2025

0 people read

8 mins read . Aug 18, 2025

Download app

Access BlinkX
everywhere
across device

Join the Future of Trading

with BlinkX

#ItsATraderThing

Open Trading Account
Verify your phone
+91
*By signing up you agree to our terms & conditions