Washington: US Federal Reserve has once again increased the interest rates by 0.75% on Wednesday. This is the fourth increase in the last month and the first instance of two successive interest rate hikes of 0.75% since 1994. The US stock markets have reacted positively to the rate hike. While the interest rate is hiked, the growth has declined by 0.9% for the second consecutive quarter, which indicates that the US economy is slipping into recession.
Jerome Powell, Chief of the Federal Reserve, announced a fresh rate hike. He said, “Currently, the labour market is extremely tight, and inflation is too high in the United States. A major decision may be taken during the meeting in September depending on the information in hand and the information available at that time.” The inflation index in the United States peaked at 9.1% in June.
Time and again, the Federal Reserve has clarified that the interest rate hikes are done to control the soaring inflation. However, despite three successive rate hikes, inflation has not reduced. Instead, it has been rising. The US population may have to face a recession along with high inflation. Within 24 hours of the Fed rate hike announcement, the quarterly growth rate data was released, which shows a decline of 0.9%. 
This is the second consecutive quarter of the declining growth rate.
Technically, two successive quarters reporting a decline in the growth rate indicates that the economy is in recession. However, the US President and senior US economic officials are unwilling to accept the recession even though analysts, economists and financial institutes have concluded that the US economy is in recession. Apart from the US, many leading economies of the world, including the European countries and China, are on the decline. Reuters has reported that the energy crisis, soaring inflation and increasing interest rates indicate that the global economy is on the brink of recession.
Related posts:
US stock markets crash amid Shutdown and rise in interest rates
Along with US, European and Asian stock markets crash after Apple’s announcement
US Federal Reserve cuts interest rates by 0.25%, President Trump disappointed
Signs of new crisis in the US housing sector: Federal Reserve
Digital US Dollar will help maintain its dominance internationally: Federal Reserve Chief Jerome Powell
Strengthening of USD is a problem for other economies – IMF warns
US nationals may have to bear the pain for some more time – Federal Reserve Chief warns
US Federal Reserve raises interest rates by 0.75%
