Here’s how 9 other central banks adjusted key rates after the Fed’s 3rd straight jumbo increase

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  • The Federal Reserve’s 75-basis-point rate hike was only one of many central bank moves this week.
  • The Bank of Japan kept its benchmark rate steady, while others raised interest rates. 
  • Here’s how nine other central banks adjusted key rates.

The Federal Reserve raised interest rates by 0.75 point on Wednesday, though a bevy of other central banks also had policy adjustments slated for this week. 

The Fed’s latest move was the third rate hike of that size this year, with officials scrambling to tame inflation. Fed Chair Jerome Powell signaled that more interest rate hikes are likely to come. 

Last week, the World Bank said policymakers were “raising interest rates this year with a degree of synchronicity not seen over the past five decades.”

Global inflation has soared through 2022, in part due to Russia’s war on Ukraine, Europe’s persisting energy crisis, and what many commentators believe to be late policy reactions in response to historic inflation. 

Traders in the US, meanwhile, are pricing in an additional 125-basis-point rate hike over the next two Fed meetings.

Here’s an overview of what’s happening in nine central banks around the world. 

  • Japan: The Bank of Japan maintained low interest rates in keeping its benchmark measure at minus 0.1%, taking a different route than other banks around the world and keeping away from aggressive policy.
  • UK: The Bank of England made a 50-basis-point hike, raising its key rate to 2.25%, and is set to begin selling bonds. 
  • Norway: Its bank raised rates by 50 basis points, matching the UK’s 2.25%.
  • Switzerland: Increased rates by 75 basis points, to hit 0.5%. 
  • Indonesia: Raised its benchmark rate by 50 basis points, to hit 4.25%. 
  • Turkey: Slashed its benchmark rate from 13% to 12%. 
  • Taiwan: The East-Asian nation’s central bank increased its discount rate by 0.125 point, to hit 1.625%. 
  • The Philippines: Raised its benchmark overnight borrowing rate by 50 basis points, to hit 4.25%. 
  • South Africa: Raised key repurchase rate by 75 basis points, to 6.25%. 

Turkey’s move was a shocker, given that inflation in August clocked in above 80%. The lira fell to a record low against the dollar. 

The US, for its part, won’t be able to handle the Fed’s plan to raise rates above 4%, according to JPMorgan’s strategy chief David Kelly, adding that the Fed’s delayed hawkishness will likely tip the economy into a recession. 

“This economy has one foot in the grave,” Kelly told CNBC Wednesday. “It really looks like it could get pushed into recession, and I just don’t see the reason why. If inflation is coming down slowly, let it come down slowly.”