The prospect of a larger increase

The prospect of a larger increase has rattled markets since last week, following May inflation data released on Friday.

The consumer price data reported a record increase in 40 years in the 12-month measurement, with 8.6%.

Markets and some economists quickly concluded that rates could also rise more than expected, not download tiktok video half a percentage point (or 50 basis points), but three-quarters of a point (75 basis points), as they eventually did.

This is the largest rate increase in more than 27 years.

"We're very hopeful that the Fed will only raise 50 basis points today, but the market and media frenzy over the past few days...obviously makes 75 basis points much more likely," he lamented before the meeting. announced economist Ian Shepherdson of Pantheon Macroeconomics in a research note.

credibility at stake
Guideline rate hikes increase the cost of loans that commercial banks make to their customers.

The Fed is struggling even more to curb inflation because its credibility is at stake. Its officials claimed for months that this price increase would only be temporary, and therefore they only began to tighten the screws in March.