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Super Wednesday: the US FED defines a new rate hike

2023-02-01T14:53:46.759Z


The US central bank is expected to apply an adjustment of 25 points, to leave it between 4.50 and 4.75%.


The

Federal Reserve of the United States

(FED), and the Organization of Petroleum Exporting Countries and their allies (

OPEC

+) will communicate this Wednesday the steps to follow in their policies, on a Wednesday that the market awaits with

special attention.

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

In the last decision last December, the entity resolved to raise rates by

some 50 basis points 

with the aim of moderating the high inflation registered by the United States.

The Fed's restrictive path - one of the fastest in decades - began in March of last year when it ordered an initial increase of 25 percentage points at rates that until then had been at levels close to zero, with the aim of sustaining the economy during post pandemic recovery.

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

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

Given the slowdown in inflation,

the expectation is that the Fed will continue reducing the pace of rate hikes

with an increase of less than

25 points, leaving it in a range between 4.5% and 4.75%.

The big unknown will be the message from the Fed chairman, Jerome Powell, at the end of the meeting, as

clues are being sought

about how long the agency will continue to increase rates.

OPEC meeting

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

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

According to Goldman Sachs, the cartel would continue in this conservative position and will not reverse the cut until at least

the second half of the year.

Also the ECB


For its part, on Thursday, another body will define a new rate hike.

It will be the

European Central Bank (ECB)

facing an inflation that, despite moderating in December for the second consecutive month by marking 9.2% annual, remains

well above the target

of 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

are betting on an increase of 50 basis points

, according 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 - of 50 points, like the ECB, taking it to 4%.

Telam Source

NE

look also

The rise in rates cools the world economy

The European Central Bank increases interest rates and maintains the fight against inflation

Source: clarin

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