Washington. Be prepared to bear another blow of inflation on you and our pockets. The reason for this is a decision taken in America. The US Federal Reserve has hiked interest rates, the biggest hike in 28 years. The Federal Reserve has raised interest rates by 0.75 percent. Inflation in the US in May was the highest in 40 years. In view of this, the Federal Reserve decided to increase the interest rate so much. This decision has caused a big jump in the US stock markets. The Dow Jones crossed the 30550 level. The S&P also went above the 3770 mark. The US dollar has also strengthened. Now its effect is going to be seen in India. If the value of rupee falls further, inflation can break the back of common people here.
The crisis on the rupee may deepen due to the increase in the interest rates of the US Federal Reserve. Economists are agreeing to this. In fact, whenever the Federal Reserve changes the interest rate in the US, most countries reduce or increase their interest rates. The Reserve Bank of India (RBI) has also increased interest rates twice on the indication of increasing the interest rate in the US. Inflation is expected to rise because the gap between the US and India bonds narrows when interest rates rise. Because of this, investors also sell in the stock market and this also affects the rupee and the price of shares.
Inflation in the US stood at 8.6 per cent last month. Due to rising interest rates, loans become expensive and people’s spending power falls. Due to decrease in demand, the price of things also starts falling. At the same time, the currency also starts getting stronger. US Federal Reserve Chief Jerome Powell has also indicated that interest rates may increase if needed further. This step can be taken in July.