The president of the Federal Reserve (Fed) of the United States, Jerome Powell, pointed out that this organization will possibly approve another interest rate hike of 0.5% or 0.75% points at its July meeting.
In his appearance before the media after the Fed’s two-day monetary policy meeting, Powell publicly communicated what he expects to happen at the next Fed meeting, on July 26 and 27, something very unusual for him.
He also said it minutes after the Fed announced a 75 basis point rise in interest rates, which now places them in a range between 1.5% and 1.75%.
Despite forecasting another rise of 0.75 or 0.5 points in July, the Fed chairman acknowledged that the 75 basis point rise is “unusually high” and assured that he does not expect movements of this type to become “usual”.
This Wednesday was the largest rate hike since November 1994, a time when Democrat Bill Clinton was in charge of the White House and the Fed was led by the historic Alan Greenspan.
After years of cheap money, the Fed turned to a restrictive monetary policy in March to combat rising prices in the country.
Last Friday it became known that inflation in the United States shot up in May to its highest rate in the last 40 years, at 8.6%, a new rise in consumer prices driven above all by the sharp increase in energy prices.
Just one day later, on Saturday, the price of a gallon of gasoline (3.78 liters) at the country’s gas stations reached US$5, a figure never before recorded.