Fed Reserve hikes interest rates by 50 bps, starts shrinking assets

04/05/2022 Argaam

US Federal Reserve

The Federal Reserve raised, today, May 4, interest rates by 50 basis points (bps), the biggest hike in interest rates in two decades.

 

Policy rates were hiked to range between 0.75% and 1%.
 
In its policy-setting Federal Open Market Committee, the US Central bank added that It will begin reducing asset holdings on its $9 trillion balance sheet starting from June. 

 

The plan will see will see $30 billion of Treasurys and $17.5 billion on mortgage-backed securities roll off. After three months, the cap for Treasurys will increase to $60 billion and $35 billion for mortgages.

 

Fed Chairman Jerome Powell is set to hold a news conference later today to comment on the monetary policy decision.

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