U.S. stocks jumped after the Federal Reserve on Wednesday raised the benchmark borrowing rate by 0.75 percentage points amid rising inflation in the country.
It was the largest interest rate hike in the United States since 1994 as food and gasoline prices soared in the country.
“It’s critical that we bring inflation down if we’re going to have an extended period of strong labor market conditions that benefits everyone,” Federal Reserve Chairman Jerome Powell said, adding, “We’re not trying to cause a recession now, let’s be clear about that.”
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The historic rise in interest rates boosted the Dow Jones Industrial Average which ended the day up 1.0% to close at 30,668.53 while the Nasdaq jumped 2.5 points to 11,099.15 .
Meanwhile, US President Biden has denounced big oil companies, saying “far higher than normal profit margins passed directly to American families are not acceptable.”
Watch: US inflation hits new 40-year high
In a letter to oil companies, the US president said his administration was “ready to use all reasonable and appropriate tools of the federal government and emergency authorities to increase refining capacity”, although the press secretary of the White House, Karine Jean-Pierre, declared that it was the “patriotic duty” of the oil companies to increase their production.
Biden said the families “deserve immediate action” while asking the oil companies to come up with concrete, short-term solutions to deal with the crisis.
(With agency contributions)
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