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The rapid rate hike by the Fed will actually increase inflation in our country even more.

22/09/2022

Inflation in our country will rise much more as a result of the Fed’s dramatic rate rise.

As predicted, the Federal Reserve raised interest rates by 0.75% early on September 21 (Malaysian time).

The U.S. federal funds rate has now been raised to a target range of 3% to 3.25%, the highest level since 2008, as a result of the Federal Reserve (FED) boosting interest rates three times in a row by 0.75%.

When the Fed revealed its interest rate hike strategy, it also gave the impression that it would keep raising rates often, even though doing so may make a recession more likely. In November and December, the Fed will have two more opportunities to hike interest rates this year.

By the end of the year, interest rates are predicted to be between 4% and 4.5%, with the Fed raising rates by an average of 0.75% in November and 0.25% to 0.50% in December.

A strong dollar has developed as a result of the Federal Reserve’s aggressive interest rate increases, while emerging market currencies have declined quite quickly. The ringgit has risen to 4.57 against the US dollar as of September 22. It won’t be shocking to see the ringgit to US dollar exchange rate cross 4.60 or perhaps 4.80 if the Fed keeps raising interest rates.

The Federal Reserve abruptly increased interest rates, which compelled Bank Negara Malaysia to match the Federal Reserve’s rate-hike pace. Lending rates will follow if Bank Negara Malaysia raises interest rates by 0.25 to 0.50% in November.

The July inflation rate for my nation was 4.40%. Our imports will cost more as a result of the strong US dollar and weak ringgit, and our inflation rate will undoubtedly increase over the coming several months.

All that is left for now is for everyone to plan ahead, make prudent investments, and spread out their risk.

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