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US Federal Reserve rases rates again by 25 basic points

Washington, Mar 22 (Prensa Latina) The United States Federal Reserve (FED) today raised interest rates by 25 basic points, as part of the strategy to return high inflation to the two percent target.

However, the financial authority indicated that it is about to stop new increases in borrowing costs, as a result of the recent turmoil in the financial markets after the collapse of two banks in that country.

As a consequence of the increase confirmed this Wednesday, the reference interest rate for one day of the United States central bank in a range of 4.75 to 5.00 percent.

In addition, there are updated projections showing that 10 of 18 officials on the Fed’s monetary policy committee expect rates to rise another quarter of a percentage point by the end of this year, the same point considered in the December projections.

However, due to the flash bankruptcies of Silicon Valley Bank (SVB) and Signature Bank, announced last week, the Fed’s latest monetary policy statement no longer says that “continued hikes” in rates are likely to be appropriate.

In parallel, the Federal Open Market Committee said “further policy tightening may be appropriate.” The possibility was left open that an additional quarter percentage point rate increase, perhaps at the next Fed meeting, could represent a point to halt hikes. Meanwhile, the financial outlook is complex.

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