The US Fed raises rates again by 0.75% to 4% to combat inflation

The Federal Reserve has confirmed all the forecasts and forecasts of analysts and the markets and has again raised interest rates in the United States by 75 basis points (0.

Thomas Osborne
Thomas Osborne
02 November 2022 Wednesday 12:41
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The US Fed raises rates again by 0.75% to 4% to combat inflation

The Federal Reserve has confirmed all the forecasts and forecasts of analysts and the markets and has again raised interest rates in the United States by 75 basis points (0.75%) to the range between 3.75% and 4% . With an overheated economy and full employment, the Fed has not wavered in confirming its restrictive monetary policy despite the pounding of the recession drums.

Inflation rules. And, in the absence of October data, September's 8.2% is enough to accelerate the pace. The labor market data, moreover, do not play in favor of a relaxation in the strong rate of increases -from 0.15% to 4% in nine months-, at least for now. Just today the data was known that the number of payrolls of US companies increased by 239,000 in October, more than expected, which shows the strength of the economy. The Reuters forecast was for 195,000 new jobs.

The market is now waiting for a message from Jerome Powell, chairman of the Fed, which may shed some light on the next steps. At current levels, the market is betting on a softer rise, of 50 points in December, to explore all options at the start of 2023, depending on the behavior of prices and the economy. Analyst consensus does not see rates above 5%.

On the rebound, the Fed's move now adds a little more pressure to the European Central Bank (ECB), which set rates at 2% a week ago and will meet its governing council again on December 15 . With inflation that in October has shot up to 10.7% -we will have to see the figure for November- and such high rates in the United States, the ECB will find it almost impossible not to raise rates another 0.75 % up to 2.75%.