The Federal Reserve is ready to announce this Wednesday a new rise in the interest rate, it would be the eighth time since March of last year; a measure taken by the institution to deal with the inflation that the United States is experiencing, however it is also expected that for this day the central bank report on some adjustments in its policyat a time of great tension given the risk of plunging the country into a recession.
What many economists expect this time is for the Fed to announce a minor increase in the interest rate for the second consecutive time a 0.25% is what they calculatein this way to continue softening the approach, in addition to many it is likely that the president of the Federal Reserve, Jerome Powell, will emphasize again that his strategy to reduce inflation is far from over.
Since the start of this move, the Fed has filed a series of increases in borrowing costs, while seeking to reduce rising prices and stifle demand, all this according to specialists, The unemployment rate may continue to rise. Although if a change is announced this Wednesday, it is possible that this aggressive strategy will be given a positive pause.
For central bank policy officials, it is relevant to continue to fight inflation hard, many are in favor of small incremental interest rate increases In this way, they will have significant time to continue evaluating the impact, and they assure that if they do not act in this way, inflation could rise to unsustainable rates, therefore they will require strong measures to undermine it.
For their part, economists warn that recession is imminent by the end of this year, since the increase in interest rates will continue to weigh on the economy. Within the forecasts it is also expected that GDP falls between the second and third quarter of the year.
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Source: La Opinion
