Fighting inflation

Synchronised rate hikes by large central banks would increase financial stability risks

The global fight against high inflation continues. The Federal Open Market Committee (FOMC) of the US Federal Reserve, as widely expected, raised the policy interest rate or the federal funds rate for the fourth consecutive time by 75 basis points on Wednesday. The US central bank is raising rates at the fastest pace since the 1980s to contain inflation, which is at a near four-decade high and considerably above the medium-term target of 2 per cent. The rate was at 8.2 per cent in September. While the Fed is determined to bring down the inflation rate closer to its medium-term