The Fed raises rates by a quarter-point

Yesterday, the Federal Reserve’s policy-making committee unanimously voted to serve the US a McQuarter-pointer, raising interest rates by 0.25%. It’s the ninth consecutive time the Fed has voted to raise baseline interest rates, marking its most aggressive pace of monetary policy tightening since the early 1980s (the last time inflation was this high).

Interest rates are now set at a range between 4.75% and 5.0%. That’s their highest level since 2007, and up from near-zero as recently as last March. The pace of which, like the Beatles to rock music, has made quite an impact:

• The average 30-year fixed mortgage rate has more than doubled since last January (3.29% → 6.90%).
• The yield on a two-year US Treasury bond increased from 2.1% in March of last year to 4.0% this week.
• Average credit card interest rates are sitting at 20.4%, up from 16.3% a year ago.

Plus, the historic collapse of Silicon Valley Bank earlier this month occurred in part because the Fed’s rate hikes over the past year had devalued the bank’s long-term assets.

👀 Looking ahead… If the Fed were in the music business, right now they’d be DJ Khaled. In the central bank’s official statement, published yesterday, a majority of officials signaled their intention to raise the benchmark rate by 0.25% once more in early May (anotha one), then hold at that level through December.