The U.S. Federal Reserve has raised the base interest rate by 0.75% in an effort to control extreme inflation. This marks the second consecutive month of aggressive rate hikes. The decision was unanimous among the 12 board members. Federal Reserve Chairman Jerome Powell cited high consumer price inflation and supply chain issues as reasons for the rate increase, with warnings of possible further inflation. This move has implications for global markets, as the U.S. interest rate now exceeds that of Korea, potentially leading to fund outflows from the latter. The International Monetary Fund (IMF) has significantly lowered global economic growth forecasts, with concerns about a looming recession. Consumer expectations of rising prices have reached a record high, impacting consumption. The IMF's revisions reflect challenges like high inflation, economic blockades, and the ongoing Ukraine crisis, raising concerns about a potential recession.
Sure, here are the key facts extracted from the provided text:
1. The U.S. Federal Reserve is raising the base interest rate by 0.75% to control extreme inflation.
2. This is the second consecutive month of interest rate increases.
3. Yeonju announced the rate increase, making it the second in a row in the history of the Hyundai Federal Reserve.
4. This is the first time the interest rate has been raised by 0.75 percentage points.
5. It was a unanimous decision by 12 board members, focusing on price stability.
6. Federal Reserve Chairman Jerome Powell mentioned the consumer price inflation rate, high net oil levels, and supply issues as factors for the rate hike.
7. Powell warned that inflation may continue due to factors like the Ukraine invasion.
8. There is speculation about a large conventional interest rate hike in September.
9. Powell does not believe the U.S. economy is in recession due to a strong job market.
10. With the rate increase, the U.S. interest rate is now higher than Korea's.
11. There have been three interest rate reversals since 1999.
12. Foreign investors may withdraw funds from Korea due to higher U.S. interest rates.
13. The IMF lowered the global economic growth rate for the United States and China.
14. Private consumption supported growth but may decrease due to rate hikes.
15. Consumers expect prices to rise, leading to demands for wage increases.
16. The Bank of Korea predicted that for every 0.25% point increase in the base interest rate, private consumption decreases by up to 0.15%.
17. There is concern about the possibility of an economic recession.
18. The global economic growth rate has been adjusted downward.
19. High inflation, China's economic blockade, and the Ukraine situation contribute to the economic outlook.
20. The U.S. economy is slowing, but it's not considered a recession.
21. The GDP growth rate for the second quarter of the United States is expected to be negative.
22. Two consecutive negative growth quarters could indicate an economic recession.