a difficult period for the economy is coming — idealista/news

The chairman of the United States Federal Reserve (Fed), Jerome Powell, has widely warned that The country’s economy is facing a difficult period due to the effects that interest rate hikes will cause.

“We have to put inflation behind us. I wish there was a painless way to do it. There isn’t.” The central banker has underlined in the press conference after the monetary policy meeting that concluded this Wednesday.

After this two-day conclave, the Fed has decided raise the country’s interest rates by 75 basis points, to a target range of between 3% and 3.25%. This is the third consecutive increase of this magnitude that the Fed undertakes. It has caused the price of money to reach its highest level since January 2008, a few months before the crisis of that year was triggered with the bankruptcies of Bear Sterns and Lehman Brothers.

Powell has added that it is necessary for monetary policy to reach a “constraining” state for a certain time, and has recalled that historical data warn of the dangers of relaxing it before time.

“No one knows if this process will lead to a recession or, if so, how significant this recession will be,” said the Fed president. He has also added that the country will have to go through a period of much higher growth. lower than estimated before inflation ran riot.

Looking ahead, the US central bank plans to continue raising the price of money, until it is above 4% before 2023.

The Article Is In Spanish🡽

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