The US Federal Reserve announced a historic rate hike of 75 basis points in May.
(Photo: Reuters)
Washington According to Fed Director Christopher Waller, the US Federal Reserve (Fed) should raise interest rates by three-quarters of a percentage point at its July meeting. “I definitely support another 75 basis point hike in the key interest rate in July,” Waller said during a debate at an economic forum on Thursday. “Probably a 50 basis point hike in September and after that we can discuss whether we go back to 25 basis points or do more if inflation doesn’t come down.”
Fears of a recession are exaggerated, added the central banker. The central bank will get inflation under control. There will be aggressive rate hikes. There is a risk that economic damage will result. However, given the strength of the labor market, this should be limited. St. Louis Branch Fed Chairman James Bullard also said he was in favor of raising interest rates by 75 basis points at the next meeting. Markets were already expecting that from the Fed, he said in a speech in Arkansas.
At the June meeting, the Fed raised interest rates more than they had since 1994. It decided on an increase of 0.75 percentage points to the range of 1.50 to 1.75 percent. Inflation in the United States surprisingly shot up to 8.6 percent in May – the highest level in more than 40 years.
More: Hedge funds bet massively against Japan’s central bank: The country’s traditional low interest rate policy could very soon plunge it into chaos.
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