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FED raises its reference rate by 0.25 points: US rates hit 2007 highs

FED raises its reference rate by 0.25 points: US rates hit 2007 highs

The Federal Reserve (FED) The US announced this Wednesday a new rise in interest rates of 0.25 points, a quarter of a point, which places rates in a range of between 5 and 5.25%, as reported by the EFE agency .

The increase, the tenth in the last year, is in line with what was predicted by analysts and comes in a context of high banking instability. In the statement, the Fed did not refer to whether this could be the last hike before taking a break due to the instability of the banking system.

The rate reached on this day by the FED reaches its highest level since 2007, which occurred during the so-called cycle of monetary contraction that overwhelmed the country between 2004 and the year in question.

The Federal Reserve is expected to pause its rate hikes and begin a more progressive cut towards the second half of 2023. However, incumbent Jerome Powell has suggested on more than one occasion that there would be no rate cuts until 2024.

In March, inflation in the US reached 5% from the peaks of 9.1% in July 2022, thanks in large part to this aggressive rise in reference rates applied by the Fed, in a movement not seen since 1980. However, this 5% range remains above the 2% that the FED has set as a goal.

Source: Larepublica

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