Bloodbath on the share market as the ASX plunges 2% after US Fed hikes rates by 0.75%
- Australian share market’s S&P/ASX200 plunged 2 per cent in first 10 minutes
- This occurred after US Federal Reserve’s 0.75 percentage point rate increase
The Australian share market has plunged after the US Federal Reserve raised interest rates by a massive 0.75 percentage points.
The benchmark S&P/ASX200 plummeted by 2.11 per cent in the first half hour of trade on Thursday, falling to 6,840.4 points.
Mining giant BHP dived 2.83 per cent to $38.13 as the Commonwealth Bank fell 1.64 per cent to $104.23 by 10.30am, Sydney time.
Global share markets have tumbled after the US Federal Reserve raised the federal funds rate by 75 basis points overnight to a 14-year high of 3.75 per cent to 4 per cent.
The latest American rate rise was triple the Reserve Bank of Australia’s 25 basis point increase on November 1 that took the cash rate to a nine-year high of 2.85 per cent.
The Australian share market has plunged after the US Federal Reserve raised interest rates by 0.75 percentage points
The US Fed’s Federal Open Market Committee declared it was ‘highly attentive to inflation risks’.
The statement issued on Wednesday night, Australian time, mentioned the word ‘inflation’ nine times.
‘Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures,’ it said.
‘Russia’s war against Ukraine is causing tremendous human and economic hardship.
‘The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity.’
The US inflation rate of 8.2 per cent in September was near a four-decade high while the equivalent level in Australia of 7.3 per cent was the highest in 32 years.
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