The Federal Reserve also rotates

The fear of inflation is already a proven reality and movements are beginning on several sides to control it.

The US Federal Reserve has increased its basic interest rate by 0.25 points and announces other hikes during the year, approaching 1.87%.

The Fed has tightened its increase path, and aims to reach 2.75% in 2023. The specific measure on Wednesday is more restrictive due to the announcements that accompany it.

This will perhaps help to mitigate the galloping rise in inflation to a certain extent, since it is, to a large extent, a rise in energy prices of external origin.

But it is sure to reduce the projected increase in economic growth for the American superpower.

With a single stroke of the pen, the approved increase marks the beginning of a more restrictive monetary policy.

It reduces and in some elements cancels the accommodative policy that it had been following since 2018, and even before, with the "quantitative easing" initiated by Ben Bernanke in 2009 and followed by Janet Yellen.

It also throws overboard the so-called new monetary policy strategy, which the entity approved in October 2020.

The latter is not trivial for the "future guide" on which the credibility of the institution is intended to be based, since then it foreshadowed that it would not raise rates until 2024. It is a bad sign that halfway through the path promised as guidance to the markets, but at the same time there are compelling reasons to consider the eventual convenience of the turn.

In essence, the meteoric rise in inflation (significantly aggravated by the war in Ukraine), which stood at 7.9% in February, an unprecedented level in the last four decades.

The immediate evolution will certify if the degree and amplitude of the turn are adequate or if the influential institution has gone too far.

In reality, the dilemma that grips not only the Fed, but all central banks, is diabolical.

They can emphasize the priority of growth in the face of recessionary threats increased by Putin's war, maintaining their successful expansionary policy (for which the doves are bowing), or they can try to clamp down on inflation with restrictive policies of more scarce and more expensive money ( what tempts the hawks), and then it will be harmful to public debt and private investment.

The influence of the Fed is great but its ability to drag the European Central Bank is also limited.

The North American cycle is more mature than that of the eurozone.

February inflation was 7.9% there, compared to 5.8% here;

unemployment in January, 6.8% against 4%, and the rise in GDP in 2021, 5.7% against 5.2%.

Europe has a greater margin of possibility to temper and dose a change of sign in monetary policy.