Federal Reserve to hike key interest rate in June & July

The U.S. Federal Reserve will hike its key interest rate by 50 basis points in June and July, with rising chances of a similar move in September. These numbers come from a Reuters poll of economists, who see no pause in rate rises until next year.

Faced with inflation running at just below a four-decade high and more tightening in the labour market, the U.S. Federal Reserve is under pressure to quickly take its policy rate to the neutral level that neither stimulates nor restricts – and beyond.

All economists in the Reuters poll predicted a 50 basis point federal funds rate hike to 1.25 per cent -1.50 per cent on Wednesday, after a similar move last month. Another such hike was pencilled in for July by most of the survey contributors.

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