KOCHI: The world is in fear of recession again with the US Federal Reserve raising interest rates by 75 basis points (bps). This is the first such increase in interest rates since 1994. The interest rate has been hiked from 0.75-1.00 per cent to 1.50-1.75 per cent. The Federal Reserve has said it will raise interest rates in July as well. It had increased by 0.50 per cent last month.

Reason for the increase in interest

• Consumer price inflation
• Covid, the skyrocketing cost of essential commodities due to production shortages and supply chain disruptions in wake of Ukraine-Russia war

Impact

It will push America into a recession

It is likely to spread globally soon