Due to rampant inflation in the US, the US Federal Reserve announced today that the interest rate will be raised by 75 basis points.
– It is a full-scale experiment that has derailed. Enormous stimuli to the economies during the pandemic have pushed and created this inflation, says SVT’s financial commentator Kristina Lagerström.
The announcement not only affects the US economy, but when the Federal Reserve tightens, it also hits stock exchanges around the world and global demand, via stronger dollars and higher interest rates. In addition, it is pushing interest rate increases in countries such as Sweden.
– Will the interest rate increases succeed? Will they lower inflation? The risk is that this will not be the case in either Sweden or the USA. It is not so easy to lower inflation due to rising energy prices and exacerbated by the Ukraine war. We may well get both high interest rates and continued high inflation. Which is a very bad situation, says Kristina Lagerström.