Federal Reserves raised its lending rate by 75 bases points
7/14/2022, 2:39:08 PM
The FED announced that according to its statutory mandate to seek maximum employment and price stability, it will raise its lending rate by 75 bases points to 1.75%. While this may sound very low, considering that it was less than a quarter of a percent halfway through March, this is a significant change, all of which has taken place over the last 3 months. Why in such a harry? The FED, alongside most economists, expected the inflation to be transitory LAST SUMMER. Science, however, is evidence-based; data from last September started to disagree with that assumption. As a result, since last October, many economists began to call for higher rates; but the FED continued believing that inflation would go away and didn’t want to be confused with the facts.