US Fed causes a flutter in the market
04 May 2023
The US Federal Reserve’s decision on Wednesday to increase the interest rate by 25 basis points, from 5 to 5.25 per cent has sent a flutter across the banking business circles in America. First, there is a sense of relief that there is a slowdown in the pace of rate hike, which had been 50 basis points throughout 2022 and until now. The 25 basis points hike is seen to indicate that the Fed does not feel the need to hike rate aggressively to fight inflation, and it means that inflation is indeed less threatening than it did till now.