Federal Reserve hikes interest rates to tackle inflation
09 May 2022 | 1:29 pm
The Fed raises interest rates by the most in over 20 years The Federal Reserve raised interest rates by half a percentage point Wednesday, in an effort to cool off demand and lower inflation. Consumer prices have been rising at the fastest pace in 40 years.
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France's cost of living crisis shows signs of stabilizing, as inflation dropped from 7.1% to 6.7% in December. It's among the lowest levels in the Eurozone, but many households and businesses are still struggling. French bakers are asking for more financial aid, with the cost of flour up a staggering 45%.
Inflation in the 19 countries using the euro stood at 9.2% year-on-year in December. Having peaked in October at 10.6%, a slight reduction in the pace of inflation is prompting hopes of the peak having passed.
Inflation in Germany stood at an aggregate of 7.9% for 2022, official figures show. That's the highest it's ever been in Germany's post-war history. Food and fuel prices in particular drove consumer prices skyward.
A building-price explosion has ruined Germany's apartment-building plans. The rental market is becoming nightmarish, and experts say the government hasn't even begun to grasp the scale of the crisis.
With the latest increase, the Fed's target interest rate is set in a range between 4.50% and 4.75% — its highest level since late 2007. The Fed has been rapidly hiking rates since March of 2022 in a bid to snuff out persistent inflation.
The European Commission has revised its economic forecasts upwards slightly, predicting growth of almost 1% in the bloc for 2023. Inflation is expected to slow but remain high, a little more so outside the eurozone.
Relentless rains in South Africa have claimed at least a dozen victims with the bad weather forcing the government to declare a national state of disaster. It comes less than a year after the country’s deadliest floods. And, as the civilian death toll rises from rebel fighting in Eastern Congo, more people are seeking refuge in the North Kivu town of Goma.
The government in Buenos Aires has imposed price caps on many goods to rein in runaway inflation. While the curbs are welcomed among low income locals, economists doubt they will remedy the country's persistent problem.
The annual inflation among the 20 nations that use the euro has fallen, but less than expected as food costs surge.
Food prices contributed to the high inflation rates, increasing even more than fuel prices. The prices of energy products were 19.1% higher year-on-year in February.
The US Federal Reserve faces a tricky balancing act, as it tries to navigate high inflation and instability in the banking sector. Alexander Yokum, of CFRA Research, says the collapse of Silicon Valley Bank and Signature Bank could affect the Fed's next interest rate decision, despite a 6 percent jump in consumer prices.
The West African nation is facing one of its worst economic crises in decades. Soaring inflation is compounding the sufferings of many Ghanaians who now have to dig deeper into their pockets to afford essential goods.
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