The US Federal Reserve’s decision to raise interest rates by a quarter percentage point this month marks a significant shift in monetary policy as the central bank seeks to dampen war-induced inflationary pressures. Although it is the first time the Fed has hiked rates since July 2023, in some respects it represents a return to normal after many years of artificially low borrowing costs. To put the Fed’s move in perspective, three Capital Group investment professionals offer their assessment of the current rate environment and its potential impact on the economy and markets.
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