Electricity, food, petrol and furniture are constantly reaching new price peaks in the USA. The central bank’s most important task is to ensure that prices do not rise more than 2 per cent a year. But over the past year, prices have risen 8.6 percent, the US consumer price index showed on Friday. Inflation is the main reason why the world’s most powerful central bank chose to raise interest rates by 0.75 percentage points tonight. This is a sharp increase from the current interest rate of 0.75-1 per cent. This is the largest interest rate jump since 1994. The goal is to force down the demand for goods, services and workers in the US economy. The hope is that companies will have to lower prices and slow down wages. Going forward, Americans will have to settle for the steepest rise in interest rates in recent times. The bank signals that it will continue to raise interest rates, to slow down the economy, and limit inflation, which has not been higher in 40 years, writes the Wall Street Journal. Jerome Powell (left) is the world’s most powerful central bank governor. Most recently, two weeks ago, he spoke about the problems in the US economy with US President Joe Biden. Photo: LEAH MILLIS / Reuters Looking gloomily at the future – We bought the house a long time ago. We have tied the interest rate, thank god for that! But I’m worried, says Jamie Smith to news in Washington DC It was announced that the central bank would raise interest rates. But the prospect of more expensive interest rates at the same time as prices eat up the purchasing power of Americans makes Americans uneasy. Jamie Smith has gone through the family’s finances to get an overview after the prices rose sharply. Now she has started to think twice when she buys goods in the grocery store. Photo: Snorre Wik / news Prices are rising so fast that the difference is noticeable from month to month on the wallet, several Americans tell news. This weekend, a new price peak ticked in at the petrol stations. Student Carter Davis says that he could fill up the tank for around 600 Norwegian kroner this spring, while he now has to pay almost 800 kroner. – It makes up a good proportion of the pay slip, especially for a student with a part-time job, says Davis. Carter Davis and his girlfriend work part-time alongside their studies. Photo: Snorre Wik / news Smith, on the other hand, has several children, and sees other families struggling to afford to live as before. – I have a son who starts high school and will manage on his own in a few years. Will he get the same standard of living he grew up with? I do not think so, she says. Read also: Must pull 77 housing projects – Skivebom Prices began to rise last spring. Then US Federal Reserve Chairman Jerome Powell interpreted the rise as a ketchup effect after the pandemic. But prices just kept rising. – Total disc boom. The record boom of all time with regard to inflation forecasts, is the verdict from portfolio manager Olav Chen in Storebrand. Storebrand manager Olav Chen believes that the US Federal Reserve should have been earlier in raising interest rates. Photo: Lise Eide Risanger / Storebrand He shouted warnings last year, and guessed the central bank was wrong. In December, Powell had to crawl to the cross, abandoning the belief that price increases are temporary. Now the central bank must put all its cloth in place to bring down galloping prices in the US economy. Money printing must go down, at the same time as interest rates must rise quickly. – The consequence is, of course, that households and companies that are highly indebted get shocked and do not cope with the increased expense, says portfolio manager Olav Chen in Storebrand. Read also: How prices rise in Norway Expect a bad horse cure The horse cure with a shock rate will be so tough that several economists believe the US economy will shrink over the autumn. – I think the central bank is actively, and they say so, looking to cool the economy. This may well happen in a situation with high price growth, says interest rate strategist Lars Mouland in Nordea. But even if the stock markets have already plunged more than 20 percent this year, the central bank will not cut interest rates again immediately, according to Mouland. – The difference from previous years is that the effect is not that the central bank cuts interest rates. For months, investors have dreaded higher interest rates. The broad stock market index S&P 500 has fallen over 20 percent so far this year. Share prices have particularly fallen for IT companies. Photo: Seth Wenig / AP Norwegians will also notice that interest rates will rise across the Atlantic. – Historically, there has been a very strong link between Norwegian and American interest rates. I also think the interest rate level in Norway will approach 4 percent eventually. Central Bank Governor Ida Wolden Bache in Norway will hold the next interest rate meeting on Thursday in a week. Then it is expected that the interest rate will rise by 0.25 percentage points, although some economists also believe that it may be possible to raise interest rates twice. Photo: Stian Lysberg Solum / Stian Lysberg Solum
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Shocking with triple interest rate hike – news Norway – Overview of news from different parts of the country
