The US Federal Reserve has decided to throw everything it has into fighting inflation, even at the risk of causing a recession. That changed on June 15, when the Fed raised its benchmark interest rates by 0.75 percentage point and indicated the next hike might also be 0.75 point. With both inflation and public expectations worsening rather than improving, there was a strong argument for the Fed to make fighting inflation its priority. And the Fed will very likely be raising rates further in 2023. When it became dug in at double-digit rates in the 1970s, the Fed had to raise interest rates to nearly 20% to rein it in.

Source: Wall Street Journal June 20, 2022 02:11 UTC