The Federal Reserve The United States kept its interest rates at zero on Wednesday, January 26, and indicated that an increase will occur “soon”, in a context of persistent high inflation levels and improvements in the labor market.
“With inflation well above 2% and a strong labor market, the (monetary) committee believes that it will soon be appropriate to raise the range of reference rates,” the Monetary Policy Committee (FOMC) said in a statement after two meeting days.
Those responsible for the Fed stressed that they will end their monthly purchases of assets “at the beginning of March”, a condition for raising rates, possibly at the meeting scheduled for mid-March.
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Reference rates were cut in March 2020 to deal with the coronavirus pandemic, in order to sustain consumption and investment.
Now, the objective of the organism when raising its interest rates is to affect prices and curb demand. Higher rates make credit more expensive for individuals and companies. The Fed also noted a reduction in supply problems, which should improve the supply of goods and materials and help curb inflation.
The New York Stock Exchange greeted the statement with the Nasdaq rising 3.21% after several days of decline. Likewise, prices increased 7% in 2021, their fastest increase since 1982.
Source: AFP
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