Friday, March 29

The US Federal Reserve raises rates by 50 basis points and closes the year with seven increases

The Federal Open Market Committee (FOMC) of the United States Federal Reserve (Fed) has decided to unanimously approve an increase in the country’s interest rates of 50 basis points, until placing them in a target range between 4.25% and 4.5%, as reported this Wednesday.

This represents the highest price of money registered by the country since December 2007, a few months before the crisis broke out that year with the bankruptcies of Bear Sterns and Lehman Brothers. With this Wednesday’s increase, the Fed has raised rates seven times out of the eight times it has met during 2022.

“Inflation remains high, reflecting pandemic-related supply and demand imbalances, with higher energy and food prices, and broad price pressures,” the Fed said, pointing to Russia’s war in Ukraine as a factor that is pushing inflation up.

The US monetary authority has once again predicted that it will be “appropriate” to undertake new interest rate hikes in upcoming meetings.

On the other hand, the balance sheet reduction plans have remained unchanged, reinvesting the principal of the debt that matures, with the exception of 95,000 million dollars each month, between Treasury bonds and mortgage securitizations.

Unemployment remains unchanged

The US labor market created 263,000 nonfarm jobs last November. On its side, unemployment remained unchanged at 3.7%, thus maintaining the labor recovery in a sustained manner.

The country’s economy experienced growth of 0.7% of its GDP in the third quarter, according to the second estimate of the data published by the Government’s Office of Economic Analysis.

Likewise, the personal consumption spending price index, the variable preferred by the Fed to monitor inflation, stood at 6% last October compared to the same month last year, three tenths less than the previous month. . The monthly rate registered an expansion of 0.3%, without changes compared to the previous month.

The underlying variable, which excludes energy and food prices from its calculation due to their greater volatility, stood at 0.2%, three tenths less, while the annual rate grew by 5%, two tenths less.



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