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US Fed makes fourth jumbo rate increase and signals more to come

Concerns come as central banks around the world furiously tighten monetary policy in their fight to tame inflation, creating an environment investors and policymakers say is fertile ground for episodes of financial instability

Concerns come as central banks around the world furiously tighten monetary policy in their fight to tame inflation, creating an environment investors and policymakers say is fertile ground for episodes of financial instability

Federal Reserve officials made their fourth supersize interest rate increase in a row on Wednesday (Nov 2) and signalled that they planned to lift rates higher than they had previously anticipated as inflation proves surprisingly rapid and stubborn.

The Fed made clear in its policy statement that it would soon slow down the rate increases, giving officials more time to see how the economy was digesting its moves to date.

That pushed stocks higher as investors sensed a letup in the Fed’s aggressive push to constrain the economy.

But Fed Chair Jerome Powell underscored during a news conference after the central bank’s two-day meeting that policymakers were dedicated to wrestling price increases lower and were nowhere near stopping their efforts to raise borrowing costs and slow growth.

The Fed lifted rates another three-quarters of a point this week, setting them in a range between 3.75 per cent and 4 per cent.

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