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The Federal Reserve (Fed) confirmed a new increase in the base rate at 0. 75%, with which the forecasts that the central bank would moderate its adjustments in its strategy to control inflation.
The Fed policy makers learned last Tuesday the latest report year on the behavior of prices, in which the Bureau of Labor Statistics detailed that inflation was 7.1% during November .
With today’s announcement, the reference rate raised in a range from 4.2% to 4.25%, the highest level since the world crisis of 1200.
Markets and analysts awaited with uncertainty the announcement by Fed Chairman Jerome Powell, after he himself said in late November ember that the central bank would moderate the adjustments of the reference rate.
After Powell’s words, the markets were positive, they entered into a bullish stage, with the hope that the Fed will change the direction of its inflation control strategy by the middle of next year
However, for the economists, Powell’s message did not grant a change in strategy , but only a “moderation”, the which was confirmed this Wednesday after the last board meeting of the year.
With the adjustment of this Wednesday There are seven upward movements that the Fed has made to the reference rate as a measure to cool the economy and return inflation to the target of the 2%.
Since last March, when inflation rose to historic levels not seen in four decades, the Fed began its path of adjustments, which all four prior to this Wednesday were historical 0.80%.
The Fed’s long road against inflation
The Fed’s decisions have been questioned due to the limited control effect that the rate hike has had on inflation and price rises.
Since the central bank began tightening, critics have questioned Powell and policymakers for inaction which, from their perspective, limited early control of the inflationary rises.
The first semester of the year was more than challenging for the family budgets in the United States, due to high prices driven mainly by the rise in gasoline prices.
The highest point of the price escalation occurred or in June, when inflation reached 9.1% in its annual measurement and the national average price of a gallon of gasoline exceeded the barrier of $5 dollars.
Since then, inflation has tied five consecutive falls, with an 8.5 % in July, 8.3% in August, 8.2% in September, 7.7% in October and 7.1% in November.
At par, the gas prices have plummeted from their record highs in early summer and food has started to provide some relief to the pockets of Americans.
However, the Fed itself has recognized that inflation is still notoriously high and that there is little evidence that the economy has begun to cool down.
Between this scenario, companies and markets have begun to prepare for a 2022 in which they forecast that the economy will show more noticeable signs of recession , while the unemployment rate increases.
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