Beautiful Virgin Islands

Tuesday, Jun 24, 2025

US interest rates see fourth 0.75 percentage point rise to tackle inflation

US interest rates see fourth 0.75 percentage point rise to tackle inflation

America is to continue its aggressive monetary tightening campaign to tackle inflation driving cost of living concerns, with economic hardship likely to result.

The US central bank has imposed its fourth major interest rate rise in a row.

The Federal Reserve, the central bank known as the Fed, has once again hiked rates by 0.75 percentage points in an effort to curb soaring inflation.

The widely-expected rise will mean more expensive borrowing for the likes of mortgage holders and those paying credit card debt.

American interest rates now stand at 3.75% to 4% up from 3% to 3.25% since the last increase in September.

The latest tough stance has been taken in an effort to limit spiralling inflation, which stood at more than 8.2% in the US in the 12 months up to September. The rises are being made as part of an overall plan to reduce inflation to 2%.

There is to be no let up in pursuing that target as the committee that decides US interest rates said it anticipated "ongoing increases" in rates will be appropriate "for some time".

The Fed has taken on responsibility for inflation, speaking at the announcement, chair of the Fed, Jay Powell said price stability is the responsibility of his organisation and the bedrock of the economy. "Without price stability, the economy does not work for anyone," he said.

Just how high those rates reach remains to be seen. Mr Powell added there's "significant uncertainty" around the level of rate rises but it's expected rates will be higher than previously expected.

What will determine how much interest rates rise are readings on public health, labour market conditions, inflation, and financial and international developments.

The longer the current high rate of inflation continues, the greater the chance that expectations of inflation will become entrenched, Mr Powell added.

Now is not the time to be considering when interest rises may moderate, he said, ongoing rate hikes are needed to get to a level that is "sufficiently restrictive".

The impact of those rate rises are already having a negative effect on the economy, economists have said.

"A Fed-induced recession is still a very real - and dangerous - possibility," said Rakeen Mabud, chief economist and managing director of policy and research at the Groundwork Collaborative.

"The slowdown in the housing market is the canary in the coal mine - a warning of the real price we will all pay if Chair Powell continues on his interest rate bender."

If rates continue to rise a recession worse than that experienced after the global financial crisis could result, the United Nations Conference on Trade and Development (UNCTAD) had warned.

The rate had been 0% at the beginning of this year but the Fed has progressively increased the figure across five announcements. The low rate was reached during the pandemic when the Fed wanted borrowing to be cheap for businesses and consumers to remain financially afloat.

Not since the early 1980s has the Fed embarked on such an aggressive monetary-tightening campaign with Mr Powell on Wednesday describing the rises are increasing at a "historically fast pace".

Prior to Wednesday's increase, the Fed had already upped rates in September, June and July by what were, at the time, rises not seen since 1994.

The Fed is just one of many central banks targeting interest rates as inflationary pressures drive the cost of living crises across economies.

On Thursday, the Bank of England is anticipated to also raise its base rate of interest by 0.75% to 3%.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Airlines Evaluate Flight Cancellations Amid Escalating US-Iran Tensions
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
BBC Demands Perplexity AI Immediately Stop Using Its Content
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
Political Turmoil Resurfaces in Belgium Amid Economic Concerns
Fed policymakers divided on timing of interest rate cuts
Trump signals imminent agreement with Harvard University
Inheritance tax referendum alarms Swiss billionaire community
Japan cancels bilateral security meeting amid US defence demands
AI skeptic Emily Bender warns that ‘the emperor has no clothes’
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
×