The US Federal Reserve (Fed) announced this Wednesday an increase in interest rates of 0.25 points, which are located in a range between 4.75% and 5%, amid the crisis caused by the collapse of two banks in the country. the third suspect.
These increases come in the ninth year with competitive growth, although it is less than anticipated by H, who talked about accelerating the rate of growth when the banking crisis had not yet erupted. Read here: This dollar agreement was opened this Wednesday, March 22 in Colombia
The Fed’s Federal Open Market Committee (FOMC), which made the decision after a two-day meeting, said “the US financial system is healthy and resilient.”
“Recent events tend to result in tighter credit conditions for households and businesses, weighing on economic activity, employment and inflation.” The scope of these is uncertain. “The policy remains highly sensitive to inflation risks,” he said in a note.
He also predicted that “some additional tightening” of his monetary policy could be necessary to achieve his inflation target, although he emphasized that he would continue to monitor the repercussions of this.
It is expected that the chairman of the US central bank, Jerome Powell, will appear shortly before the details of the decision of the Federal Open Market (FOMC, in English) organization are reported after the two-day meeting.
To try to stop inflation, H increases in March 2022 by a timid 0.25. In May it raised rates by 0.5 points and in June it already started a series of increases of 0.75 points, before slowing down to 0.50 last December and further reducing it to 0.25 in February.
Two weeks ago, the question for experts was whether H would raise interest rates this time by 0.25 or 0.5 points, but everything changed with the bankruptcy of Silicon Valley Bank (SVB) and Signature Bank, whose financial situation was worsening due to debt to the monetary policy of the organization , so much so that there had been speculation about the possibility that the central bank would suspend growth.
Finally, H decided to continue with the increases, since inflation in the US is still well above its 2% target and with a robust labor market. In February, inflation in the country stood at 6% year-on-year, the lowest rate since September 2021, after falling four tenths compared to January.
In the current scenario, the main economic leaders of the country, especially the Secretary of the Treasury, Janet Yellen and Powell have tried to reassure the citizens and the markets that the situation will not lead to a financial crisis. Read also: Economy in Colombia according to ISE study. grew up
H, in fact, imposed a new system to ensure that banks that protect customer deposits have to make money, and increased the frequency with which it provides foreign exchange operations to ensure that there are enough dollars. in financial matters.
In addition, major US banks joined last week to bail out First Republic Bank with $30bn, which threatened to go the way of SVB Signature after a sharp drop in share prices.
Panic also crossed the pond and almost ended with the Swiss bank Credit Suisse, which was finally acquired over the weekend by its competitor UBS after a crisis of confidence that sank its price in the market.
Before H was announced, Wall Street opened this Wednesday in the red, albeit almost flat, and the Dow Jones Industrial Average, its main index, lost 0.12%, while European markets began the session down, slightly falling, pending the outcome. US central bank certificate.