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The world’s largest economy the USA is struggling with 40-years high inflation, the federal reserve central bank is also to unleash another interest rate hike now after the latest data showed a warring u.s inflation picture this can happen markets are reacting to that already they are down since morning.
An increase in interest rate is expected this Wednesday now After the conclusion of the federal reserve’s two-day policy meeting this can happen and as of now, an interest rate hike looks to be the primary weapon for U.S central bank to bring down inflation.
The central bank has already increased the benchmark lending rate four times this year including two straight three-quarter-point hikes in June and July but this constant increase in rate hike is causing concerns. some believe aggressive action could tip u.s economy into recession.
It would increase the problem and it can copy around the global as well moreover consumer price reports for august showed a continued rise in prices of housing food and medical costs, although current time inflation is not the only thing which is concerning policymakers.
The fear that consumers and businesses might believe that rising prices will become a permanent feature in the economy can lead to a phenomenon called stagflation.
It is basically a situation where the inflation rate is high economic growth rate slows down and unemployment in the country remains steadily high meanwhile, prices of goods and commodities have been inflicting pain on American consumers and businesses.
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