The US Federal Reserve raises interest rates by 0.5%, the largest increase in more than two decades

The United States Federal Reserve (Fed) has decided to raise the country's interest rates by 50 basis points, to place them in a target range of between 0.75% and 1%, as reported on Wednesday in a statement.

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This is the biggest rise in the price of money since 2000, 22 years ago. Since then, rate hikes have always been limited to 25 basis point increments.

Likewise, the monetary authority has agreed to begin reducing the size of its balance sheet as of June, at a rate of 37.5 billion dollars per month for an initial period of three months. After that time, the volume of reductions will rise.

The movement of the US central bank comes despite the fact that the US economy contracted 0.4% in the first quarter of the year compared to the previous three months, as a result of the rebound in covid-19 cases due to the variant omicron and high inflation, according to the Government.

The president of the Fed, Jerome Powell, has not hesitated to send several notices in which he predicted several rate hikes in 2022 with the aim of curbing inflation. In March, the United States registered the highest inflation rate since 1981, at 8.5%, driven especially by higher energy, food and housing prices.

The US government blames the phenomenon primarily on the war in Ukraine and repeatedly refers to inflation as "Putin's price hike," referring to Russian President Vladimir Putin.

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