British media: The U.S. Federal Reserve announced its first interest rate hike in over three years, raising the benchmark interest rate from 3.5%-3.75% to 3.75%-4%, citing that inflation remains too high and has persisted for too long. Fed Chair Kevin Warsh stated this was a "prudent and responsible" decision, noting that the U.S. inflation rate has exceeded the 2% target for five consecutive years.
The rate increase will raise the cost of loans, mortgages, and credit card borrowing, but it will boost savings returns. Subsequently, several major U.S. banks raised their prime lending rates from 6.75% to 7%, potentially increasing consumer debt costs. The average 30-year fixed mortgage rate is currently around 6.76%.
This rate hike has also drawn opposition from President Trump, who previously repeatedly called for rate cuts and labeled the Federal Reserve's decision-making body as "hostile and politicized." However, the Fed emphasized that strong employment and economic performance enable it to continue prioritizing price control.
Markets expect interest rates to possibly rise further to 4%-4.25% later this year, followed by a gradual decline in subsequent years. The European Central Bank and the Bank of England are also facing similar inflation pressures.
Original article: toutiao.com/article/1876539550531596/
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