In an expected event, as a measure to curb inflation that does not subside and deal with banking turmoil in the United States, the Federal Reserve (FED) raised its interest rate from 4.75% to 5%.
At a news conference in Washington, Fed Chairman Jerome Powell said that “if the economy performs as projected, the appropriate level of the federal funds rate will be 5.1% at the end of this year, from 4.3%. at the end of 2024 and 3.1% at the end of 2025. Powell said, however, that these projections are not a decision or plan of the Committee, because if the economy does not develop as projected, the path of policy will be adjusted accordingly. to promote the objectives of maximum price stability and employment. He maintained that the Fed will continue to be committed to reducing inflation to the 2% target and keeping long-term inflation expectations well anchored.
An increase in the interest rate in the United States impacts all the economies of the world, especially those that have a high dependence on that market, because it can slow down investment and employment.
He said inflationary pressures remain high. The median projection for headline inflation is 3.3% this year, 2.5% next year and 2.1% in 2025. Powell said the process has a long way to go.
