US Federal Reserve: Fed raises interest rates by 0.75 percentage points

For the third time in a row, the US Federal Reserve has raised interest rates sharply by 0.75 percentage points – to a range of 3.0 to 3.25 percent. The background is the historically high inflation in the USA.

The US Federal Reserve has continued the series of major rate hikes and raised the key interest rate by 0.75 percentage points for the third time in a row – to the new range of 3.00 to 3.25 percent. The move is intended to counter rampant inflation, which is historically high in the US.

The central bank had already increased interest rates by 0.75 percentage points in June and July. The Fed has raised interest rates five times this year. At the beginning of the year it was still in a range of 0.0 to 0.25 percent. In their interest rate outlook, the monetary watchdogs also signaled that they would step up their efforts and intend to raise the price of money to an average level of 4.4 percent by the end of the year.

The financial markets are concerned that an overly aggressive interest rate policy could stall the economy. According to its current figures, the Fed only expects minimal growth in the US economy of 0.2 percent for the current year. According to the latest Fed estimates, gross domestic product (GDP) will increase by 1.2 percent in 2023.

Financial markets had expected large rate hikes

The financial markets had been counting on this renewed major interest rate hike in the USA. Before the interest rate decision, the German stock index DAX had made up for an early slide below the 12,600 point mark. On Wednesday, investors initially reacted nervously to the fact that Russia had ordered a partial mobilization of its own armed forces. This temporarily pushed the leading index into the red by more than one percent. It hit a three-month low at 12,520 points.