According to Powell, the Fed has this consideration on the table. It intends to debate it during the next meeting of the Federal Open Market Committee next May.
The US Federal Reserve (FED) president, Jerome Powell, highlighted that the agency would be considering raising interest rates even more. He states that the possibility of increasing them again by 0 is on the table with five percentage points or 50 basis points.
Interest Rates Could Increase
This information got revealed by Powell during a presentation before the International Monetary Fund (IMF), where he confirmed that the new increase in interest rates is a procedure that will get discussed at the next meeting of the Federal Open Market Committee ( FOMC), which will happen in May.
Let’s consider that this measure is part of the Fed’s intentions to stop the increasing inflation in the US economy, which stands at 8.5% and has become the highest in the last 40 years.
Keep in mind that interest rates remained close to zero until last March when the first such increase of about 25 basis points (0.25 percentage points) since the pandemic started.
The Goal is to Minimize inflation.
Considered by some representatives an aggressive move and by others essential, the Fed’s procedures and plans aimed at addressing the increasing inflation rate felt by the local economy in the price of certain essential goods, items, and services.
Powell highlighted that this and other measures are crucial to restoring price stability. However, the director of the FED is not sure if this 8.5% is the highest inflationary peak for now, but he suggested not to count on it but to wait and see the effect that this and other procedures can have.
Markets crumble down
Although the markets were already crumbling down on April 21, Powell’s revelation does not seem to have positively affected reversing the said trend.
Figures from the NASDAQ, Dow Jones, and S&P500 are declining positions between 1% and 2%. The crypto market also seems to be following the downward trend, with items such as Bitcoin, Ethereum, and a good part of the most significant digital assets, with falls registered at 4% in the last hours.
Powell’s Stance on the Russian-Ukrainian Conflict
Jerome Powell said Russia’s conflict in Ukraine could highlight the need for market regulation. He expressed that punished entities or individuals can use this asset to circumvent economic blockades.
The CoinDesk news outlet picked up an article where it quotes the words of the president of the FED:
The president said the Russian invasion generated the need for congressional action on digital finance, including digital assets. This thriving industry has many parts, and there is no regulatory framework that covers this field.
By: Jenson Nuñez
