The Fed triples interest rates again

Expert: The only question is how far we will fall 

Of: 

Nora Fernstedt 

Published: Less than 2 hours ago 

Updated: Less than 20 min ago 

Policy rate (

Styrränta)

The US central bank, the Fed, raises the key interest rate by 75 basis points. 

This means a triple increase for the third time. 

The interest rate is now at the highest level since before the financial crisis in 2008. 

- We know we are facing a cliff - the only question is how far we will fall, says savings economist Frida Bratt. 

The US central bank, the Federal Reserve, triples interest rates for the third time in a row. 

The announcement, which was expected, means that the interest rate will rise to 3.00–3.25 percent. 

The New York Stock Exchange plunged after the announcement. The Dow Jones industrial index fell by 0.8 percent and the Nasdaq lost 0.9 percent 

But during Fed Chair Jerome Powell's press conference, Wall Street calmed down somewhat.

Jerome Powell, Chairman of the US Federal Reserve. Photo: Patrick Semansky/AP

This is how you are affected 

The announcement shows that the Fed is still determined to bring down inflation, says Frida Bratt, savings economist at Nordnet. 

- They continue to raise sharply. They don't raise by a hundred points, as has been said, but they announce larger interest rate increases later on, she says. 

However, 75 points is still a big increase. It affects Swedish households in several ways - both our savings in shares and mutual funds and mortgage interest rates. 

Frida Bratt explains that one effect of the Fed's interest rate policy is that the fixed mortgage rates have already had time to go a long way. 

- They will probably rise a little more now because market interest rates can conceivably go up. 

What the Fed does also has an indirect impact on the Swedish economy, because the Swedish Riksbank follows what the American one does. 

- If you are at all interested in savings, your mortgage and personal finances, you should really keep an eye on what the American central bank is doing. 

"The alternative would be worse" 

Yesterday, the Swedish Riksbank presented a historic interest rate increase of one percentage point. A message that led to concern both among households and companies. 

It will be more expensive to borrow - but you also have to consider the alternative, says Frida Bratt. 

- The alternative would be worse. If prices continue to rise, the value of our savings erodes and this is very harmful to the economy. 

"Dark for very, very many" 

More interest rate increases are to be expected. The Fed has spoken of a key interest rate reaching 4.4 percent next year. Then it should stop - it's all about when you manage to stop the rampant inflation. 

- They will certainly do that, it's just a matter of what the price tag will be, how deep the recession we're entering will be. 

The words that can describe the global economy right now? Nervous, uncertain – and dark, says Bratt. 

 - Yes, it is dark from a private financial perspective for many, many people. And from a socioeconomic perspective. This is not a development that anyone wants to see. The direct reaction to the Fed's rate hike. Later in the evening, the stock market recovered. 

The direct reaction to the Fed's rate hike. Later in the evening, the stock market recovered.