As 75 Basis Point US Fed Rate Increase Is Priced In, Markets Rise

US Senator Elizabeth Warren said on Wednesday that the Federal Reserve's pace of swift and significant interest rate hikes this year puts the US economy at risk of a recession and won't cool the blazing inflation.

Prior to the Federal Open Market Committee's fourth rate increase of 2022, the Massachusetts Democrat was interviewed. The Fed Funds Rate is now in the range of 2.25 percent to 2.5 percent, which was generally anticipated following the hike of 75 basis points. In an effort to reduce the excessive consumer price inflation, the Fed has started an aggressive cycle of rate increases. In June, the US CPI rose to 9.1%, the highest level since November 1981.

The congressman listed several factors that contribute to high inflation, including supply chain issues, COVID outbreaks around the world, Russian President Vladimir Putin's invasion of the Ukraine in February, and "near-monopolies that are engaging in price gouging."

And raising interest rates won't solve any of this, according to Warren, who noted that Fed Chairman Jerome Powell "confirmed" as much in a congressional testimony.