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Al Mayadeen's correspondent: Two were martyred in an initial toll of the Israeli drone strike that targeted the al-Asira neighborhood in the city of Baalbek, eastern Lebanon
Al Mayadeen's correspondent: An Israeli drone strike targeted the al-Asira neighborhood east of Baalbek, eastern Lebanon
Sheikh Naim Qassem to the pager attack survivors: You are the greatest resistance. Know that 'Israel' will fall because it embodies aggression, crime, and occupation; victory is truly yours
Sheikh Qassem to the pager attack survivors: The value of what you are doing despite your wounds is immense, and here you are, treading the path of the Master of Nation's Martyrs and the leaders
Sheikh Qassem to the pager attack survivors: You are moving forward with insight deeper than sight itself. The enemy sought to eliminate your role in the battle, yet you remain steadfast and continue the fight
Hezbollah Secretary-General Sheikh Naim Qassem to the pager attack survivors one year later: You are healing from your wounds and rising above them. You have successfully passed the test
Palestinian media: Reports of stabbing operation in occupied al-Quds.
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Egyptian PM Mostafa Madbouli: Egypt is targeted in plans to redraw regional map
AEOI Chief Mohammad Eslami: Our presence in IAEA General Council and fact-checking helped in preventing unilateral rhetoric that aims to portray Iran as an unregulated country

Fed delivers another steep rate hike with more to come

  • By Al Mayadeen English
  • Source: Agencies
  • 2 Nov 2022 23:17
4 Min Read

The US central bank raises the benchmark borrowing rate by 0.75 percentage points.

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  • Fed delivers another steep rate hike with more to come.
    Fed delivers another steep rate hike with more to come.

As was to be expected, the Federal Reserve increased interest rates sharply on Wednesday, as its efforts to tame soaring inflation gained more significance in the wake of the crucial US midterm elections.

President Joe Biden must fight to keep both chambers of Congress under his control as high inflation squeezes American families of all political persuasions.

Prices have not been significantly affected by the Fed's aggressive rate hikes so far this year, but they have fueled worries about a potential recession even though the labor market is still robust.

In its all-out effort to contain inflation not seen since the 1980s, the US central bank increased the benchmark borrowing rate by 0.75 percentage points, the fourth such increase in a row and the sixth this year.

The Federal Open Market Committee (FOMC), which sets policy, stated that additional increases will be required to rein in rising prices, but that it will consider the impact on the economy when determining the pace of subsequent moves. This leaves open the possibility that smaller steps will be taken in the coming months.

Read next: Price index rises despite Fed bids to combat inflation

The benchmark lending rate has increased by three-quarters of a percentage point to 3.75–4.0%, which is the highest level since January 2008. But Fed Chair Jerome Powell issued a warning, saying that policymakers are not yet prepared to stop their initiatives.

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As the housing market sharply cooled amid higher borrowing costs, the key inflation measures demonstrated the increase in prices and the tight labor market, with job openings on the rise and private hiring accelerating in October. 

"It will take time, however, for the full effects of monetary restraint to be realized, especially on inflation," Powell told reporters.

"It's very premature in my view to be thinking about or talking about pausing our rate hike. We have a ways to go." But he added that at the meeting in December, the committee could start talking about the prospect of easing up on the rapid rate increases.

Slow growth 

Politicians are putting more pressure on Fed officials as they attempt to fight inflation without sending the economy into a recession. Powell acknowledged that slowing inflation while averting a downturn "likely" requires below-trend growth and that the window for achieving a soft landing has shrunk.

Inflation is driving voters away from Biden, and polling data suggests that a "red wave" could sweep the opposition Republicans into control of the House and Senate.

Read next: US Fed set for further steep rate hike as recession fears loom

Republicans blame Biden squarely for inflation and slower growth, while the President's Democrats are concerned that the Fed's actions will result in higher unemployment. However, Powell has argued that allowing high inflation to persist would cause American families and workers even more suffering.

Powell brushed off criticism that the central bank had moved too quickly during his press conference on Wednesday and noted that the future of the biggest economy in the world is incredibly uncertain. "No one knows whether there's going to be a recession or not, and if so, how bad that recession would be," he said.

The Fed's actions, according to White House spokeswoman Karine Jean-Pierre, are "part of our transition" to "stable and steady growth with lower inflation."

  • United States
  • Federal reserve
  • US inflation

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