This United States Federal Reserve announced this Wednesday quarter point increase interest ratesnow one It varies between 4.75% and 5%. about this ninth consecutive rise run by the US central bank fight to stop inflationBut it comes at a complicated moment: a crisis in the banking industrypartly due to the impact this aggressive monetary policy has had on institutions like the fallen Silicon Valley Bank that have unleashed their chains. global turmoil and fears.
The decision of the Fed’s Federal Open Market Committee has been announced. taken into account by most analysts.but there were doubts as to whether it would continue with the installs or give an update as some had recommended. Stop In order not to aggravate the bank crisis. And this meeting was surrounded by many. more uncertainty than usual.
Attention is given to: Press conference It will now be presented by Fed Chairman Jerome Powell. must be clear and careful. You can also agree that you will hear more than one question on the topic. Fed oversight decisions in Silicon Valley Bank caseThe first of several chips to fall on both sides of the Atlantic with a domino that raises concerns about the stability and strength of the banking system.
Although the Fed own research, Many media outlets have reported that the central bank has had problems with the party that has been on its radar for over a year, and it’s unclear whether it can do more, though the party has warned there are “issues that need urgent attention.” not go bankrupt.
step change
I could not have guessed that this meeting would be so long when it came. vital. Just 15 days ago, Powell appeared before the US Congress and the US central bank ready to climb and accelerate climbs types. He explained this by arguing that various economic data showed that, despite eight consecutive data, they failed to reduce inflation as intended and cool other aspects of the economy. In February, inflation fell but remained at 6% and core inflation rose slightly. The rise in service prices continues to cause concern. Job creation is also worrisome, which remains strong with 300,000 jobs added last month after more than half a million jobs in January.
What was undetectable was just three days after that appearance. earthquake with its epicenter in Silicon Valley Bank and replicas with Signature Bank, First Republic Bank and Credit Suisse in Europe. This concern motivated public interventions and exceptional measures not seen since the pandemic and the great banking crisis of 2008. reassuring messages from the authorities both sides of the Atlantic Doubts remain about the stability and soundness of the banking system. In the US, the ghosts of a recession that had dissipated until recently have also reawakened.
This fragility it’s in the middle right now. After the fall of Silicon Valley Bank and Signature, both the Federal Deposit Insurance Corporation, the Department of the Treasury, and the Fed joined forces to guarantee that all bank deposits are covered. However, the central bank also launched a campaign. emergency loan program, improving the conditions of access to funds and the discount window. Also this weekend, agreements with other central banksIncluding the European Central Bank to provide liquidity through dollar swap line agreements, a measure also taken during two other tumultuous times of 2008 and 2009 pandemics and crises.