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US central bank raises rate by 25 basis points

The US central bank has raised its benchmark interest rate by 0.25 percentage points to its highest level since late 2007.

February 2, 2023
2 February 2023

The US Federal Reserve has raised its key interest rate by 0.25 percentage points, continuing its more moderate course.

Now the key interest rate is in the range of 4.5 to 4.75 per cent, the Fed announced on Wednesday. 

It is the eighth increase in a row and the smallest step since last March.

Most recently, the Fed raised the key interest rate by a substantial 0.75 percentage points several times – but slowed the pace at the end of last year with a rate hike of 0.5 percentage points.

Recent data show that high inflation in the world’s largest economy is on the retreat.

The Fed had been particularly aggressive in tackling high inflation – which at times was higher than it had been for decades – in recent months, raising interest rates at a rapid pace.

Most recently, the inflation rate in the US continued to fall – a sign of the first successes of the strict monetary policy. 

In December, consumer prices rose by 6.5 per cent compared to the same month last year. 

In November, the rate had been 7.1 per cent. 

It was the sixth decline in the inflation rate in a row – but it is still high.

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