FT News Briefing The biggest US rate rise in almost 30 years
Jun 16, 2022
The Federal Reserve has made its largest interest rate hike since 1994, aiming to tackle soaring inflation while maintaining job growth. Meanwhile, the ECB is preparing to implement a new plan to address rising borrowing costs amid economic instability. Billionaire investor Ray Dalio discusses the intricate ties between market dynamics and national fortunes. Additionally, the conversation touches on the impact of political extremism on democracy and highlights the crucial need for equitable education funding to combat wealth inequality.
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Aggressive Interest Rate Hike
- The Federal Reserve implemented the largest U.S. interest rate hike since 1994.
- This aggressive move aims to combat rising inflation and maintain strong labor market conditions.
Influence of Inflation Reports
- Two alarming reports revealed a significant jump in consumer prices and inflation expectations.
- These reports influenced the Fed's decision to increase interest rates more aggressively.
The Fed's Soft Landing Challenge
- The Fed acknowledges the challenge of lowering inflation without causing economic pain.
- They aim for a "soft landing" to avoid a recession, but the path is narrowing.