On March 16, 2022, the Federal Reserve announced a significant 75 basis points hike in its benchmark interest rate, the Federal Funds Rate. This move, which was the Fed’s most substantial rate increase in over 40 years, has raised questions and concerns about what it means for the economy and for consumers.
A basis point is equal to 1/100 of a percentage point, so a 75 basis points hike equates to a 0.75% increase in interest rates. This hike is a clear signal from the Fed that it is serious about combatting rising inflation and ensuring the economy remains on a stable footing. Inflation has been running at its highest levels in decades, fueled by supply chain disruptions, rising energy prices, and increased demand as the economy has rebounded from the COVID-19 pandemic.
One of the main reasons for the Fed’s decision to raise interest rates is to cool down the economy and prevent inflation from spiraling out of control. By increasing the cost of borrowing, the Fed hopes to reduce consumer spending and investment, which could help to lower demand and curb price increases. However, higher interest rates can also slow economic growth, as businesses may cut back on investments and consumers may reduce their spending.
For consumers, the Fed’s rate hike could mean higher borrowing costs. This could impact various areas of the economy, such as credit card interest rates, mortgage rates, and car loans. Consumers with variable-rate loans, such as adjustable-rate mortgages or home equity lines of credit, may see their monthly payments increase as a result of the Fed’s move.
Additionally, the stock market tends to react negatively to interest rate hikes, as higher borrowing costs can impact corporate profits and dampen investor sentiment. Investors may start to move their money out of stocks and into safer assets, such as bonds, in response to the Fed’s actions.
Overall, the Fed’s 75 basis points hike is a significant move that signals its commitment to tackling inflation. While the hike may help to slow down price increases, it could also have consequences for consumers and businesses. It will be important to closely monitor how the economy responds to these changes in the coming months and adjust financial strategies accordingly.
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This is what they have done every 10 years busting economy and destroying people life
Charts appear to say >22k< bottom i could see that, but not with the macro situation though. I dont even think talkin bout the bottom is worth it atm. Macro is the worst in decades energy, inflation, rate hikes, supply shortages etc etc its the perfect storm. From 2008ish till around 2021 when the economy was boomin & the fed was printing money btc still crash about 85%. So i find it hard to accept a 75% crash for a bear market that lines up with a global recession, dont make sense to me. Institutions & whales need retail to sell so theres enough supply to meet their demand & they aint buyin yet!! The thing is retail aint got any money to ape in to btc atm & over the next 12 months or so i see less money in the system as the fed tightens & everything goes up in price. So where will the money come from in that kind of a setting?? I really dont think weve seen the bottom yet or the kind of pain coming next year after mid terms. I guess we will see, I will keep buy and just trade long term more than ever, I have made over 5.6` btc from trading with Paul Charlton in few weeks this is one of the best medium to backup your assets incase it goes bearish<You can reach Paul on ͲeIєɠɾαm CHARLTONTRADING