For Angel Di Matteo @shadowargel
According to Powell, the measure agreed upon by the FED seeks to address the levels of inflation that shake the local currency. Analysts believe that the body could now begin to take much more aggressive measures to address the problems of the US economy.
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The president of the US Federal Reserve (FED), Jerome Powell, indicated today that the institution was ready to increase interest rates starting next March, raising the possibility that at each meeting the measures discussed to address the inflationary levels that shake the US currency will be readjusted. .
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Interest rates will increase from March this year
The announcement was made after concluding the meeting held by the Federal Open Market Committee, which lasted for two days and from which a statement with the agreements reached during said meeting emerges.
In this regard, Powell commented punctually during a press conference held today the following:
“The committee intends to raise the fed funds rate at the March meeting.”
In the statement derived from the meeting, the officials of the FED They indicated that the reduction in the purchase of assets by the entity will also continue, although they clarified that this will begin to vary after interest rates increase.
dealing with inflation
On the nature of these measures, the FED He referred to the levels of inflation that would be affecting the US currency, to which he referred to are well above the 2% originally projected after the measures applied throughout 2020 and 2021.
Reports reveal that inflation levels are currently over 7%, these being the highest seen in the US economy since the 1980s, although in contrast there are other indicators that have shown a favorable performance, such as the reduction in unemployment rates and good expectations for the labor market.
In this regard, Powell stressed that it is necessary to move quickly to respond to all the scenarios that arise, for which he commented:
“We will have to be agile to be able to respond to the wide variety of plausible outcomes. We will continue to monitor risks, including the risk that high inflation may be more persistent than expected, and are prepared to respond as appropriate.”
more aggressive attitude
Although the announced measures were already within expectations, some analysts highlight the aggressive nature with which the FED and Powell would be approaching this situation, assuming more drastic changes whose repercussions could be felt very strongly in the local economy.
In this regard, the head of research of the firm Renaissance Macro Research, Neil Dutta commented:
“The tone of Powell’s press conference is aggressive. The Fed is going to be much more willing to go higher faster [las tasas de interés] in the face of… the rise in inflation, and does not consider relaxing a bit even though unemployment levels have fallen.”
Although there is no clarity on the levels to which interest rates could rise, forecasts suggest that they could rise a quarter of a point in March, and continue to increase in the coming months. This would be a more forceful measure as opposed to the slowness with which the FED in the past, despite the criticism made by many analysts regarding the accelerated printing of capital to support the local economy.
Wall Street reacts lower
On the part of the markets, they reacted strongly after Powell’s announcement, closing for the afternoon of this January 26 partially lower after the uncertainty generated by these new measures that will take place in March of this year.
This is reflected in the rates of NASDAQ, Dow Jones and S&P 500, which recorded falls between 0.15% and 0.38%, being especially pronounced at the moment after Powell’s announcement at a press conference.
And the crypto market?
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Angel Di Matteo version / DailyBitcoin
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