The U.S. central bank has backed a half-percentage point rate hike after all the members came to the agreement that rates must significantly increase during their May 3rd meeting.
The bank members agreed that inflation is currently the central threat to the U.S. economy and that the nation is at risk of it getting harder to control with time.
This 50-point hike in the benchmark overnight interest rate is the first of its size in over 20 years. Participants agreed that more hikes of this caliber are will be needed.
“All participants concurred that the U.S. economy was very strong, the labor market was extremely tight, and inflation was very high,” the federal minutes stated. “Participants agreed that the Committee should expeditiously move the stance of monetary policy toward a neutral posture… They also noted that a restrictive stance of policy may well become appropriate.”
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