The Federal Reserve raises interest rates in the US by 0.25 points despite the banking crisis
The Fed has placed rates in a range between 4.75% and 5%. This is the ninth rate hike in a year to combat inflation, although it is less than what the Fed anticipated when the banking crisis had not yet broken out.
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Euskaraz irakurri
Euskaraz irakurri: Erreserba Federalak 0.25 puntu igo ditu interest rate, bankuen krisiari entzungor eginda
The Federal Reserve (Fed) of the United States has announced this Wednesday a rise in interest rates of a quarter of a point to place them in a range of between 4.75% and 5%, in the midst of the crisis caused by the collapse of two banks in the country and the rescue of a third.
This is the ninth rate hike in a year to combat inflation, although it is less than what the Fed anticipated when the banking crisis had not yet broken out.
The Federal Open Market Committee (FOMC) of the Fed, which has made the decision after a two-day meeting, has ensured that the “US banking system is healthy and resilient”.
“Recent events are likely to result in tighter credit conditions for households and businesses, weighing on economic activity, hiring and inflation. The extent of these effects is uncertain. The committee remains closely attentive to downside risks inflation,” he said in the note.
To try to curb inflation, the Fed began in March 2022 the rises with a shy 0.25. In May it raised rates by 0.5 points and in June it began a series of increases of 0.75 points, before slowing down to 0.50 last December and reducing them even more, to 0.25, in February .
Two weeks ago, the question that experts were asking was whether the Fed would increase interest rates this time by 0.25 or 0.5 points, but everything changed with the bankruptcy of Silicon Valley Bank (SVB) and Signature Bankwhose financial situation worsened due to the agency’s monetary policy, to the point that there had been speculation about the possibility that the central bank would pause the increases.
Finally, the Fed has 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, its lowest rate since September 2021, after falling four tenths compared to January.
Source: Eitb
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