Probably the last one in a while, but for now it’s Wednesday United States Federal Reserve approved a new one increase in interest rates, tenth consecutivethis time a quarter point.
The decision that leaves the genres in the middle It varies between 5% and 5.25%It represents the continuation of the aggressive policy of the US central bank. trying to control inflation. It was predicted by analysts and markets, now the key question for them is: What path do you follow from now on? Fed And it seems Stop.
Already after their previous conversation. The Fed has given signs that it might happen. take that break after reaching the fork reached this Wednesday, turbulence, risks and uncertainties. And in a statement on Wednesday skips references to upcoming uploads. He vaguely says that if he had previously “anticipated” these, he will now look at various factors to determine whether they are “appropriate.”
inflation and recession
With 10 interest rate hike strategies, the fastest in 40 years, leaving the economy since March last year price of money at highest level since 2007The Fed has succeeded get some inflation under control. However, price increases show permanentespecially in the industry Servicesand the US job market and wage growth remain strong, something to support inflation.
Although cooling the economyData such as the first quarter, in which the growth in the USA slowed down significantly to 1.1%, refreshed the market. recession fears. And soon after its March meeting, the Fed warned that a “mild recession” was possible later this year.
Turbulence in the bank
Complicating things even more for the US central bank, the events in the banking sector in the last two months and Intervention of three big organizations in the USA precisely their inability to manage the risks associated with rate hikes increased p.I choose from a contraction.
Banks are already becoming more reluctant to lend, which reduces demand similar to interest rate hikes, something that has had an impact on the Fed’s approach and decisions, the central bank chief said. Jerome Powell will explain in Press conference at 14:30 Washington time.
It also marks the first time since the Federal Reserve released its report on Friday’s collapse of Silicon Valley Bank and Signature (which includes First Republic Banc’s this weekend). Mea Culpa to accept failures in bank supervision.
The threat of a debt ceiling
Also, the United States is living in a rough open political battle to raise the debt ceiling. The debate is currently blocked in Congress and threatens to drag the United States into a debate in a matter of weeks, as Janet Yellen warned on Monday. unprecedented default situation. This struggle, and the threat of an unprecedented crisis with serious consequences, which Powell has warned repeatedly, triggers risks and uncertainty and will play a role in the central bank’s future decisions.