Join our daily newsletter At The Bell to receive exclusive market insights
- Major US banks have lifted their rates after the Federal Reserve hiked the cash rate by 50 basis points
- Wells Fargo, Citibank, and JPMorgan Chase & Co have increased their prime rate to four per cent in response to the rate increase
- In addition to the rate rise, the central bank will also begin a balance sheet reduction to withdraw the economic support provided during the pandemic
- Federal Reserve Chairman Jerome Powell warned of more rate rises at policy meetings in June and July
- The US dollar and government bond yields dropped as the market was pricing in a much more aggressive stance on monetary policy
Major US banks have lifted their rates after the Federal Reserve hiked the cash rate by 50 basis points.
Wells Fargo, Citibank, and JPMorgan Chase & Co have increased their prime rate to four per cent in response to the rate increase.
The jump in the cash rate marked the biggest rate rise in 22 years in the US, as the country aims to tame inflation.
In addition to the rate rise, the central bank will also begin a balance sheet reduction to withdraw the economic support provided during the pandemic.
Going forward, the main goal is to restrict inflation, which is currently three times the Fed’s target of two per cent.
Federal Reserve Chairman Jerome Powell warned of more rate rises at policy meetings in June and July. However, he dispelled rumours of a 75 basis rate increase, sending the US stock market higher.
The S&P 500 index saw its biggest one day percentage gain in almost a year, finishing three per cent higher.
Meanwhile, the US dollar and government bond yields dropped, as the market was pricing in a much more aggressive stance on monetary policy.
