The president of the Fed assured that the agency remains firmly committed to reducing inflation in the United States to a target of 2%. According to Powell, almost all participants in the Federal Open Market Committee see raising interest rates by the end of 2023 as appropriate. Interest rate increases will start again by the end of 2023 when they would peak at 5.6%.
Jerome Powell, president of the Federal Reserve of the United States (Fed), assured in the last hours that interest rates will rise with the objective of fighting inflation.
The president of the Fed shared the measures against inflation in the US. For Jerome Powell, it is necessary to reduce the growth of this trend in the country, which is why additional increases in interest rates must be made.
“We are determined to control inflation and a large majority of the Monetary Policy Committee believes that we are close to achieving it, but rates must be increased a little more,” he said.
In his words, “My colleagues and I understand the difficulties high inflation is causing, and we remain firmly committed to bringing inflation down to our 2% target.”
“A large majority of Fed officials believe that it will again be appropriate, assuming the economy performs as expected, to raise rates twice before the end of the year,” Powell said.
Interest Rates Will Raise to 5.6% by the End of 2023
Last week, for the first time in 15 months, the Federal Open Market Committee (FOMC) stopped raising interest rates, leaving them from 5% to 5.25%. However, the president of the Fed pointed out that the increases will take place again by the end of 2023 when they would reach a maximum of 5.6%.
Powell said that almost all FOMC participants see raising interest rates a bit more by the end of the year as appropriate:
“Reducing inflation is likely to require a period of below-trend growth and some easing of labor market conditions (…) The economy is facing headwinds due to tighter credit conditions for households and businesses, that are likely to affect economic activity, hiring, and inflation.”
How Have Cryptocurrencies Been Affected by This Announcement?
In general terms, the Fed’s announcement of the need to counteract inflation with more interest rate hikes. This represented a drop in US stocks. This also had a slight impact on the world of cryptocurrencies.
Even after said announcement, the cryptocurrency market has experienced a slight downward reaction. According to data from CoinGecko, the global market capitalization of cryptocurrencies is $1.21 trillion. This would mean a change of -0.4% in the last 24 hours.
Upcoming Fed Meetings
The abovementioned highlights the need to continue monitoring what may happen in the coming months. In this regard, it should be noted that the Fed meets eight times a year spaced out, approximately 40 days apart. Following up on their discussions and conclusions seems to be pertinent. Here are the dates of the upcoming 2023 meetings published by the Federal Reserve:
July 25 and 26, 2023.
September 19 and 20, 2023.
October 31 and November 1, 2023.
December 12 and 13, 2023.
By Audy Castaneda
