June 7, 2023


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US interest rates are rising.  The Federal Reserve decided

US interest rates are rising. The Federal Reserve decided

After the US central bank’s decision, rates were in the range of 3% to 3.25%.

Before the Fed meeting, analysts predicted that The US central bank will raise interest rates by 75 basis points for the third time in a row, But 2 out of 96 economists polled by Bloomberg expected a rise of 100 basis points.

The central bank indicated larger increases in the new forecast showing an increase in the interest rate to 4.40%. By the end of this year, then to 4.60 percent. In 2023, all to combat persistently strong inflation. This is more than what experts have judged.

The market immediately responded to the central bank’s decision. The US stock market collapsed and the dollar strengthened. Compared to the zloty, today it is approximately 2.6 percent.

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The FOMC said in a statement that the Fed “expects that further increases in the target range will be appropriate.”

Updated forecasts point to a protracted central bank battle with the highest inflation since the 1980s, which could at least push the economy to the brink of recession.

The pace of these increases will continue to depend on incoming data and changing economic expectations. With today’s action, we have raised interest rates by 3 percentage points this year, Fed Chairman Jerome Powell said at a press conference.

Powell added that the central bank’s ultimate goal is to bring inflation back to 2%.

A recession scenario in the United States is the most likely, so raw materials may become cheaper

High interest rates in the US are sure to have a greater impact on unemployment in the United States. According to the new Federal Reserve projections, the unemployment rate is close to 4.5%. – Brett Ryan, chief economist at Deutsche Bank, commented before the increase. In his opinion, the Fed will promote a “soft landing” scenario, that is, it will be possible to suppress inflation without causing significant damage to the economy. However, raising interest rates increases the risk of a recession in the United States.

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