Source: Newsweek —
The Federal Reserve voted to raise interest rates by half a percentage point on Wednesday, a slightly scaled-down increase after several consecutive hikes of .75 percentage points.
The hikes have all been part of an attempt to ease soaring inflation in the U.S., which has become a top issue for Americans. The Bureau of Labor Statistics (BLS) published inflation figures for November on Tuesday showing that the year-over-year inflation rate had dropped down from 7.7 percent in October to 7.1 percent last month, a welcome decrease for the Biden administration that has faced heat over the elevated prices.
Concerns about inflation in recent months have been accompanied by fears of a potential housing market crash as recent years brought soaring mortgage rates and elevated housing prices. While the Federal Reserve does not set mortgage rates, its decisions have the potential to indirectly affect them.
Federal Reserve Chair Jerome Powell himself noted in an opening statement at a press conference on Wednesday that the central banking systems policies have resulted in tightened financial conditions, and that effects on demand were being seen “in the most interest-sensitive sectors of the economy, such as housing.”