The Fed is expected to sharply increase interest rates to curb record-high inflation

The US Federal Reserve (FED) is expected to double the level of restraint next week record high inflation in the United States, while facing a series of shocks both internally and externally. Experts fear that one day these factors could lead the world’s largest economy to a recession.

The US Federal Open Market Committee (FOMC) will hold its policy meeting on May 3-4, and top officials have signaled strongly that they will raise interest rates by half a percentage point. hundred and announced plans to drastically reduce their debt holdings.

Top Fed officials, including Chairman Jerome Powell, hinted that a half percentage point increase in interest rates would likely be agreed at the next two-day policy meeting and double the rate of a zero increase. .25 percentage points deployed by the FOMC in March.

The Fed is expected to announce a plan to cut trillions of dollars of bonds and mortgage-backed securities that the Fed buys to support the economy during the Covid-19 pandemic. This will increase borrowing costs.

Both moves would further tighten lending conditions in the world’s largest economy and potentially eliminate consumer price hikes at rates not seen since the 1980s.

Job interest rate hike is expected to be one of the main policies of the Fed in this year.

However, experts warn that the FED needs to strike a “delicate balance” to prevent the risk of an economic slowdown, in the context of the US economy facing many external shocks, such as: Russian-Ukrainian conflict and the blockade orders to prevent Covid-19 in China.