Commentary 
After a prolonged period of easy monetary policy, the U.S. Federal Reserve has embarked on a tighter monetary stance. On May 4, 2022, the Fed raised its benchmark interest rate by 0.50 percent, to a target range between 0.75 percent and 1.00 percent. The hike is the largest since 2000 and follows a 0.25 percent increase in March this year, the first increase since December 2018.
Various commentators expect the Fed to raise rates several times in 2022, reaching 2.90 percent in early 2023. Starting in June 2022, Fed policy makers also plan to shrink the Fed’s $9 trillion asset portfolio. The key reason behind the tighter monetary stance is the large increase in the yearly growth rate of the Consumer Price Index (CPI), which stood at 8.5 percent in March against 2.6 percent in March last year….