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Interest Rates at Highest Level in 16 Years

The United States Federal Reserve has recently raised its key interest rate by 0.25%, making it the 10th rate hike in just a year and two months. By doing this, the Fed was able to increase its benchmark rate between the ranges of 5 and 5.25%. After this move was made, the Fed alluded to the fact that this rate hike should be the last one for a quite a while now.


For quite some time now, the people of the United States have been plagued by the extremely high borrowing costs that are a result of these rate hikes. This has caused certain U.S. industries to become extremely stagnant. The housing sector in the United States has slowed down dramatically. Additionally, a lot of banks are having trouble as well as we have seen the recent collapses of major US banks.

Fed Chairman Statement

Federal Reserve Chairman Jerome Powell stated that the most recent interest rate hike was a “Significant change” He also stated the Fed is no longer anticipating future rate hikes, but they will be “driven by incoming data” in the coming weeks and months.

Aggressive Raises

Approximately a year ago, prices for products in the United States began to raise rapidly, with the prices of goods being the highest they have been in centuries. In order to counter this, the Federal Reserve began aggressively raising interest rates. By making it more expensive to take out a loan, buy a home, and start a business, the Fed assumed that increasing these costs would cause the demand to fall and prices would eventually begin to decrease.


The raising of interest rates also contributes to combatting inflation. The rate hikes did help combat inflation in March, as the country saw its lowest inflation rate since President Biden took office, at 5%. This is still too high however, according to the Federal Reserve.

Wrap Up

The Federal Reserve rate hikes have been having an affect on everyone that is involved in the U.S. economy, particularly people looking to borrow, or buy a house. We will have to wait and see what the results of the most recent hike will be, and if the Fed will take it even further in the future.

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