AFP/Washington
The US Federal Reserve yesterday made its biggest rate hike since 2000, raising half a percentage point to a range of 0.75-1%, in an attempt to ward off inflation, noting that the US economy “is not close” to a recession.
After a two-day meeting of its monetary policy committee (FOMC), the FED indicated that further hikes “will be justified” in the future, but its president, Jerome Powell, said at a press conference after the announcements that for the moment the agency it does not consider rises of 0.75 base points for its reference rates, as some market players speculated.
The US economy is “strong. Nothing … suggests that it is close to or vulnerable to a recession,” Powell stressed. “Of course, taking into account the events in the world, the disappearance of the effects of budget policy and the rise in rates, we could see slower economic activity,” he qualified.
Wall Street reacted positively to the announcements and to Powell’s comments. The Dow Jones index climbed 2.81% to 34,061.06 points, the Nasdaq technology jumped 3.19% to 12,964.86 units and the S&P 500 advanced 2.99% to 4,300.17 points.
The president of the College of Economists of Tarija, Fernando Romero, explained that the measure will not immediately have direct effects in Bolivia, but it will make credit from that country more expensive.
“Although this measure seeks to stop the rise in prices in the US, it will also make credits or monetary aid that can be obtained from that nation more expensive, since everything is quoted in dollars,” he observed.
