A decision that places the world between various uncertainties, since a rise in the rates of the currency with the highest commercial value has a direct impact on debts, the acquisition of products in that currency, accompanied by the flight of capital from nations with weak economies. .
Higher borrowing costs could also slow consumer spending and hiring, as the FED’s long-standing low-rate policy has fueled the economy and financial markets, leading some experts to believe another recession could be triggered.
Although after its most recent meeting the entity kept interest rates unchanged between zero and 0.25 percent, it did emphasize that it will soon be appropriate to raise the target range backed by inflation that ended 2021 at 6.8 percent, a level not seen in 39 years.
The omens of a rate hike immediately strengthened the value of the greenback, which is headed for a monthly increase, thus making raw materials and goods more expensive for holders of other currencies. One example is gold, which is headed for its worst monthly performance since September.
Similarly, stocks have suffered over the past two weeks and some indices entered a correction. The Nasdaq (which groups high-tech companies) has already lost 14 percent so far this year.
Cryptocurrencies were not far behind and after a good 2021 they fell drastically in the first month of 2022: bitcoin is trading at about 35 thousand dollars, almost 50 percent below its historical price of 68 thousand dollars reached just in November 2021 .
Even the International Monetary Fund (IMF) warns that after a year supported by solid gains in the United States stock market, 2022 began with a sharp decline.
A sudden increase in rates, he said, can cause a significant drop in stocks, especially in high-value sectors such as technology.
The IMF also warns about the risks of capital flows in emerging markets, as investments in stocks and bonds in these economies are often considered less secure.
Swallow capital that can leave the weakest economies in search of higher profits.
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