WASHINGTON: The US Federal Reserve on Wednesday delivered its second straight 75 basis point rate hike, reinforcing its commitment to contain red-hot inflation.

Policymakers said inflation “remains elevated” while also noting that “recent indicators of spending and production have softened,” a sign that the aggressive set of rate hikes they have put in place since March may be beginning to bite. Central banks in the US, Canada, New Zealand, Switzerland and elsewhere have lined up with aggressive rate rises recently and the European Central Bank last week delivered its first rate hike since 2011.

Japan, which is yet to lift rates in this cycle, is the holdout dove among the 10 big developed economies.

In total, those central banks have so far raised rates in this cycle by a combined 1,215 basis points. The Fed has said high inflation is “reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.” Data last week showed US consumer prices accelerated 9.1% in June, the largest annual increase in inflation in more than 40 years.

Visit news.dtnext.in to explore our interactive epaper!

Download the DT Next app for more exciting features!

Click here for iOS

Click here for Android