The years weigh. It is not even necessary to remember that people change over time, modifying their priorities. Faced with alternatives of what to do in a given situation, the decisions they make when they are 20 years old are different from those they make when they are 60. The very mention of the years that have elapsed influences the perception of which things are more or less important what others.
The weight of the years also influenced the decision of the Federal Reservethe central bank of the US, to increase its reference interest rate by 0.25%, the first increase in six years. It also decided to accept a probable schedule of six increases during 2022, altering previous intentions that the first increase would be in 2023 and that the number of increases would be four.
The usual preference of central bankers for stability leads them to be reluctant to vary monetary policies that have been in force for a long time, to which the economic sectors have adapted. They try to avoid changes in the framework within which productive activities are carried out, avoiding sending signals that cause confusion or uncertainty. The six-year lapse was long enough to motivate such reluctance in this case, but another figure intervened to change the priority and, therefore, the decision.
In the quarter prior to the determination of the increase in the interest rate, the inflation annualized in the US was the highest in 40 years. It is more than evident that the responsibility for the control of the inflationwhich central banks used to have as the only guide for their actions, later diluted by the task of promoting employment and GDP growth, motivated the Federal Reserve to put aside their reluctance to break the chain of years of no rate increases.
In a year in which there will be mid-term elections, the impact of the 40 years outweighed the continuation of the six.
