As part of the attempts to curb inflation in the United States, the Federal Reserve (Fed), headed by its president Jerome Powell, is getting ready to take some of the most drastic measures in decades, which will complicate the economic situation of citizens in the country.
It is expected that on Wednesday, May 4 the Fed will announce the reduction in the reserve of Treasury and mortgage bonds. These measures will come in from June and will seek to further reduce credit. Specialists predict that with these measures it will be more expensive to request a loan to acquire a car, a house, a business or to buy with a credit card.
In addition to this, there is a probability that the Fed will increase interest rates by 50 points, above the quarter point, released in March. Despite representing one of the most pronounced increases since the year 2000, analysts estimate that at the next meeting in June it will also rise another half point, just like in July.
Given the forecast of several rises in interest rates in the coming months, the unknown of economists, officials and specialists on the subject focuses on how high the interest rate should be to contain the rise in prices and slow down the economy
, and how much they can reduce the historical balance of $9 trillion dollars of the Federal Reserve, given the risk of destabilizing the financial markets.
Meanwhile, financial markets value a rate of up to 3.6% for the middle of next year, which would be the highest in 15 years. For its part, Deutsche Bank estimates that the drastic increase in borrowing costs could lead to a recession in the country at the end of 2022 and beginning of 2024.
Despite the fact that the gross domestic product contracted at an annual rate of 1.4%, in According to the most recent report from the Commerce Department, consumer spending did not decline, which, if it continues, would prevent the country from heading towards a general slowdown in economic activity, experts say.
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