- Darvish tames Ohtani as Padres thrash Dodgers
- Asian markets track Wall St rally on jobs data
- Family affair as LeBron, Bronny James make Lakers bow
- Cancer, cardiovascular drugs tipped for Nobel as prize week opens
- As Great Salt Lake dries, Utah Republicans pardon Trump climate skepticism
- Amazon activist warns of 'critical situation' ahead of UN forum
- Mourners pay tribute to latest victims of deadly Channel crossing
- Phillies win thriller to level Mets series
- Yu bags first PGA Tour win with playoff win
- PSG held by Nice to leave Monaco clear at top of Ligue 1
- Lewandowski treble for leaders Barca as Atletico held
- Fresh Israeli strikes hit south Beirut
- Sucic stunner earns Real Sociedad draw against Atletico
- PSG draw with Nice, fail to reclaim top spot in Ligue 1
- Gudmundsson downs AC Milan after De Gea's penalty heroics for Fiorentina
- 'Yes' vote prevails in Kazakhstan nuclear plant vote: TV
- 'Difficult day': Oct 7 commemorations begin with festival memorial
- Commemorations begin for anniversary of attack on Israel
- 'Nothing gets in way of team,' says Celtics' MVP hopeful Tatum
- 'We will win!': Mozambique's ruling party confident at final vote rally
- Tunisia voting ends as Saied eyes re-election with critics behind bars
- Florida braces for Milton, FEMA head slams 'dangerous' Helene misinformation
- Postecoglou slams 'unacceptable' Spurs after 'terrible' loss at Brighton
- Marmoush double denies Bayern outright Bundesliga top spot
- Rallies worldwide call for Gaza, Lebanon ceasefire
- New 'Joker' film, a dark musical, tops N.America box office
- Man Utd stalemate keeps Ten Hag in danger, Spurs rocked by Brighton
- Drowned by hurricane, remote N.Carolina towns now struggle for water
- Vikings hold off Jets in London to stay unbeaten
- Ahead of attack anniversary, Netanyahu says: 'We will win'
- West Indies cruise to T20 World Cup win over Scotland
- Man Utd fire another blank in Aston Villa stalemate
- Lewandowski treble powers Liga leaders Barca to Alaves victory
- Russian activist killed on front line in Ukraine
- Openda strike briefly sends Leipzig top of Bundesliga
- Goal-shy Man Utd have to 'step up', says Ten Hag
- India bowl out Bangladesh for 127 in T20 opener
- Madueke rescues Chelsea in draw with 10-man Forest
- Beckett's belief rewarded as Bluestocking storms to Arc glory
- Trump on the stump, Harris hits airwaves in razor-edge US election
- Flash flooding kills three in northern Thailand
- Kaur leads India to victory over Pakistan in Women's T20 World Cup
- Juventus held by Cagliari after late penalty drama
- In France's Marseille, teen 'stabbed 50 times' then burned alive
- Ruthless Gauff beats Muchova in straight sets to win China Open
- India restrict Pakistan to 105-8 in Women's T20 World Cup
- England target repeat of Pakistan Test whitewash
- Penrith Panthers win fourth straight NRL title after downing Storm
- Weary Sinner happy for day off after battling into Shanghai last 16
- Pakistan's Masood warns England still a force without Stokes
US Fed announces biggest interest rate hike since 1994
The Federal Reserve announced the most aggressive interest rate increase in nearly 30 years, raising the benchmark borrowing rate by 0.75 percentage points on Wednesday as it battles against surging inflation.
The Fed's policy-setting Federal Open Market Committee reaffirmed that it remains "strongly committed to returning inflation to its 2 percent objective" and expects to continue to raise the key rate.
Until recently, the central bank seemed set to approve a 0.5-percentage-point increase, but economists say the rapid surge in inflation put the Fed behind the curve, meaning it needed to react strongly to prove its resolve to combat inflation
The super-sized move was the first 75-basis-point increase since November 1994.
Fed Chair Jerome Powell will hold a press conference after the meeting to provide more details on the central bank's plans, which will be closely watched for signals on how aggressive policymakers will be in coming meetings.
Committee members now see the federal funds rate ending the year at 3.4 percent, up from the 1.9 percent projection in March, according to the median quarterly forecast.
They also expect the Fed's preferred inflation index to rise to 5.2 percent by the end of the year, with GDP growth slowing to 1.7 percent in 2022 from the previous 2.8 percent forecast.
The FOMC noted that effects of Russia's invasion of Ukraine are "creating additional upward pressure on inflation and are weighing on global economic activity."
And ongoing Covid-19 lockdowns in China "are likely to exacerbate supply chain disruptions."
Kansas City Federal Reserve Bank President Esther George, a noted inflation-hawk, dissented from the committee vote, preferring a smaller, half-point increase.
- Caught off guard -
US central bankers began raising interest rates off zero in March as buoyant demand from American consumers for homes, cars and other goods clashed with transportation and supply chain snarls in parts of the world where Covid-19 remained -- and remains -- a challenge.
That fueled inflation, which got dramatically worse after Russia invaded Ukraine in late February and Western nations imposed steep sanctions on Moscow, sending food and fuel prices up at a blistering rate.
US gasoline prices have topped $5.00 a gallon for the first time ever and are setting new records daily.
Economists thought March was the peak for consumer price hikes, but the rate spiked again in May, jumping 8.6 percent in the latest 12 months, and wholesale prices surged as well, almost entirely due to soaring costs for energy, especially gasoline.
The Fed was caught off guard with the speed of the price increases, and while policymakers usually prefer to clearly telegraph any policy shift to financial markets, the latest data changed the calculus.
Powell had indicated policymakers were poised to implement another half-point increase in the benchmark borrowing rate this week and a similar move next month, aiming to douse red-hot inflation without tipping the economy into recession and avoid a bout of 1970s-style stagflation.
However, the central bank cannot influence supply issues, and rate hikes only work by cooling demand and slowing the economy -- meaning policymakers are walking a fine line between having an impact and doing too much.
And the impact won't be immediate.
"Monetary policy operates with lags, today's inflation reflects decisions taken a year ago," said Adam Posen, head of the Peterson Institute for International Economics and a former central banker.
"Had Fed hiked in 2021Q2/Q3, then inflation now would be different -- not least (because) the current global shocks wouldn't be piling on already high inflation," he said on Twitter.
E.Raimundo--PC