Monday , October 25 2021

The Federal Reserve raises the benchmark interest rate by up to 2.5%.



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The United States Federal Reserve recognizes its key interest rate this fourth year, U.S. to reflect on the strength of the economy, but said he expects slowdowns next year.

The quarterly route, from 2.25 to 2.5 percent, raises the Fed benchmark rate since 2008. Growth will be more costly for many consumer and business loans.

A statement issued by Fed Wednesday, after meeting recent policies, is likely to be gradually increasing the rate of "some". But the update of predictive projects has risen by almost two tariffs next year, as Fed predicted in September.

New forecasts Fed reference rate reduces the long-term rate by 2.8%, down from three percent.

React markets

The United States quickly released Wednesday afternoon, because investors reacted to the announcement. Stocks grew dramatically as Fed announced its rise in advertising. Dow Jones Industrial Average has 351 points at 23, 323 points after the interest rate before 200 points before the announcement. Dow closes for more than a year, until November 15, 2017.

Fed has raised regular regularity rates as the US economy has strengthened. Wednesday was the ninth increase in Fed since it gradually tightened its credit three years earlier.

But the mix of factors – global slowdown, war on the United States trade, mild inflation and fluctuations and price decreases – Fed has slowed the rise in the 2019 rates to avoid too much economic downturn. Nowadays, it is possible to adapt its economic policy to the latest economic data, for more flexibility or, in the Fed language, "data depends".

Fed few weeks ago got telegraphy to prepare the financial markets anywhere. But now, the risks of a surprise may increase. The following year, President Jerome Powell will hold a press conference every year with the Fed's eight meetings, one quarter. This will explain the changes in policy change. But Fed increases the risk of releasing the financial market.

Critics say they stop credit stench

Some analysts say Fed has stopped interrupting its credit-tightening in the coming months to assess how to save the economy, faces faces.

Powell, who accompanied this view, gave a lecture last month saying that Fed called the "neutral", because they did not think of stimulus growth. Powell's opinion suggested that Fed might have the criteria of slowing down or paralyzing the economic downturn.

For the moment, most economic barometers continue to show strength. The unemployment rate is 3.7%, 49 years of age. The economy is believed to have grown more than thirty percent this year, the best performance in more than a decade. Consumers, the main driver of the economy, are freely spent.

Following Fed's two tariffs for the next two years, it expects a new hike to 2020 to raise the benchmark rate to 3.1%. By the year 2021, four Fed civil servants help reverse the economy and reverse the course by actually evaluating the rates.

By reducing the long-term budget by a gross rate of between three and a half percent 2.8, Fed does not consider crediting any more than it is necessary to avoid overloading the economy. His statement is a powerful economy. But the potential threats were noticed, adding language, evaluating global development and evaluating the impact of the economy.

Growth forecast was lower

In an up-to-date perspective, Fed reduced its forecast for growth by 2.3 per cent next year, from 2.5 per cent of the three months since it was forecast. It expects a two-hundred-percent growth for 2020. These estimates are below the trump administration, with tax cuts accelerating year-on-year growth in the coming years to 3%.

Due to an unexpected healthy economy, Fed would normally raise slightly higher growth so that growth does not increase or inflate inflation. But at this moment, the risks of the economy are increasing. From China to Europe, the main economies are weakening. Presidential Donald Trump's commercial conflict in Beijing can weaken the economy over time with the two world economies.

Also, it is feared that the rapid growth of the United States reflects something high in sugar this year, artificially driven by fiscal cuts of the economy and boosted by public spending. The benefit of this stimulus will disappear in 2019 at a slower pace. And United States interest rates have risen, loans in the economic sector, cars from homes, have started to weaken.

In addition, the Treasury and Mortgages Deposits Fed created after the 2008 financial crisis have gradually decreased. This process has been the consequence of increasing the pressure on consumer and corporate borrowing rates.

Trump attacks

As economists do not see what is happening in the Fed, Trump has affected the central bank and Powell's attacks. In an unusual presidential move, Trump has repeatedly complained about increasing the Fed rate. At one point, the president called the Fed and the rise of his tracks this year, "my biggest threat."

This week, Trump walks with two tweets with the rising probability rate. In one of them, "incredible" was called upon by Fed to raise rates as "the outer world is spinning around us".

Powell, chosen by Trump as the chosen man to be president, underlined that Fed has managed fees to maximize employment and stabilize prices, without any external criticism.

The central banks will meet on January 30th. The investment in the future Federal Reserve implies reaching 27% of the day's journey.

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