The US Federal Reserve (Fed) raised interest rates by 0.5 percentage point on Wednesday. This increase is less strong than the last four times, when a 0.75 percentage point increase was added each time.
US interest rates are now between 4.25 and 4.5%. Federal Reserve policymakers believe it will be necessary to raise interest rates to 5.1% to keep inflation in check.
That higher level was stronger than economists had generally expected. US stock markets then quickly lost what small profits they had. In particular, technology stocks, which are more sensitive to high interest rates, fell.
The US economy will grow by 0.5% this year, the Fed expects. This is a more positive picture than the previous estimate in September.
Central bankers expect similarly modest economic growth next year before the US economy recovers. They expect 1.6% growth in 2024 and 1.8% one year later.
