Super Wednesday: The US Fed calls for a new rate hike

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THE United States Federal Reserves (EDF), and the Organization of the Petroleum Exporting Countries and their Allies (OPEC+) will communicate this Wednesday the steps to follow in their policies, a Wednesday that the market expects special attention.

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In the case of the FED, the institution will define a new increase in its reference interest rates.

With the last resolution of last December, the institution resolved to raise the rates about 50 basis points with the aim of moderating the high inflation recorded by the United States.

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The Fed’s restrictive path – one of the fastest in decades – began in March of last year when it ordered an initial hike of 25 percentage points on rates that until then had been close to zero, with the aim of supporting the economy in the post-pandemic recovery.

Meanwhile, he raised his rate by 50 points in May and then raised it by 75 points four consecutive times.

In this way, annual inflation in the United States, after reaching a 40-year record of 9.1% last June, began to moderate and was 6.5% last December.

Given the slowdown in inflation, the expectation is that the FED will continue to reduce the pace of rate hikes with an increase of less than 25 points, remaining in a range between 4.5% and 4.75%.

The big unknown will be the message from Fed Chairman Jerome Powell at the end of the meeting since then looking for clues about how long the agency will continue to raise rates.

OPEC meeting

For its part, OPEC+ will hold a meeting, after delegates from the group of ministers said privately last week that they do not expect the group of advisers to make any changes to existing production policy.

Specifically, OPEC is still waiting to see what the effect of China’s reopening and new European sanctions on Russia will be on supply and demand.

According to Goldman Sachs, the cartel will continue in this conservative position and will not reverse the cut until at least the second half of the year.

Even the ECB

For its part, on Thursday, another body will define a new rate hike. it will be there European Central Bank (ECB) In the face of inflation which, while moderating in December for the second consecutive month, reaching 9.2% per annum, remains well above target by 2%.

The fear is due to core inflation (which does not include energy and food) which has risen in recent months contrary to the general index.

Both the market and economists bet on a 50 basis point increaseaccording to the Bloomberg agency, leaving the interest rate for financing operations at 3%, the highest level since 2008.

Also on Thursday it will be the turn of the Bank of England, which will communicate its monetary decision, with expectations of a rise in its rates – the ninth consecutive since December 2021 – by 50 points, like the ECB, bringing it to 4%.

Source Telam


Source: Clarin

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