Rate hikes steepen as US Fed combats runaway inflation
June 15, 2022 | Brian Scheid | S&P Global Market Intelligence
U.S. Federal Reserve officials tightened monetary policy more aggressively than expected just a week ago, as inflation reached highs unseen in 40 years.
On June 15, the Fed raised its benchmark federal funds rate by 75 basis points after recent data showed that surging commodity prices, the war in Ukraine and supply chain issues continue to boost inflation to levels not seen in decades.
“We are strongly committed to bring inflation back down, and we are moving expeditiously to do so,” Fed Chairman Jerome Powell said during a press conference following the rate-setting Federal Open Market Committee’s meeting.
Market observers expected the central bank to raise rates by 50 basis points until a June 10 report from the U.S. Bureau of Labor Statistics showed that the consumer price index, a key inflation measure, had jumped 8.6% from May 2021 to May 2022, the biggest rise in more than 40 years, and the University of Michigan’s gauge of consumer sentiment fell to a record low.
