FED raises its interest rates after two years

The US Federal Reserve made its first quarter-point rise in benchmark interest rates on Wednesday to take it to 0.25%-0.50% and thus combat annualized inflation of 7.9% in February, the highest since 1982.

The boss of the entity, Jerome Powellannounced that the high consumer price index will remain that way until June and that it is expected to decrease month by month. “Expectations continue that inflation will fall in the second half of the year,” Powell told the media after the Federal Open Market Committee meeting that has been going on since Tuesday.

Meanwhile, Powell predicted a rise in inflation in the short term due to the increase in oil prices along with landings and supply problems; so that inflation will reach an accumulated 4.3% in 2022; which implies that it will take “more time” than expected to bring the IPC to the target range of 2%.

market reaction

After the announcement, wall street closed in green and its main indicator, the Dow Jones industrials, rose 1.55% to reach 34,063.10 integers, while the selective S&P 500 climbed 2.24% or 4,357.86 units.

The Lima Stock Exchange it also felt the repercussions and rose 1.16% in the S&P/BVL Peru General and thus reached 24,581.97 points; while S&P/BVL Peru Select it advanced 0.90% to reach 640.2 points.

The dollar behaved in this line, losing -0.47% to close at S/ 3.7225. Alexander Javier, Forex trader at Renta4 SAB, said that “the day there was a lot of flow from mining and offshore companies.”