The Fed’s tightening path – one of the fastest in decades – began in march last year when he arranged a first increment of 25 points percentage rates at rates that until then were close to zero, with the aim of sustaining the economy during the post-pandemic recovery.
whereupon, in May the rate increased by 50 points, and later, in the meetings of June, July, September and Novemberthe monetary organism raised them in 75 points, always alert to try to contain inflation through this financial mechanism.
The expectation for the meeting to be held in these two days is for the Fed to continue reducing rate hikes with a rise of 25 points.
The Fed, initially questioned for starting to tightening its monetary policy too late, it is now criticized for the reverse: that it is going overboard with rates and that this can generate a recession.
“Even with the recent moderation, the inflation remains high and policy needs to be tight enough for a while to ensure that inflation returns to 2% on a sustained basis,” said Fed deputy governor two weeks ago, Lael Braindard.
Other officials such as the presidents of the Dallas and Philadelphia federal reserves, Lorrie Logan and Patrick Harket, They expressed their support for increases of 25 points.
For his part, Harket emphasized that “the days of 75-point increases are surely over.”
In the same way, Christopher Wallerone of the “hawks” among the Fed’s rulers, also supported a 25 basis point hike.
What is not at all certain is what will happen in the rest of the year. Economists speculate that the Fed will make another rate hike. 25 Point Rates, Y then leave them unchangedAlthough the question is how long you will wait until you start to reduce them.
Some officials believe that policy has to remain tight for a while to avoid a resurgence of inflation.
In his last lecture, the Fed Chairman, Jerome Powell, it disappointed the markets since it did not give any anticipated definition on what would be the updates of the rates of the entity that it leads.
Source: Ambito
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