The Federal Reserve (FED) of the United States agreed this Wednesday to increase the interest rate by 0.25 points in a mechanism to curb the high inflation that the country is experiencing.
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Thus, the Fed’s decision came close to what the markets were waiting for and that had previously been pointed out by Jerome Powell, president of the entity.
In addition, the entity said in a statement that it will continue with the increases “in an appropriate range”.
This is the first increase made by the entity since 2018.
Furthermore, he said that other interest rate increases will be necessary.
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In relation to the war that is developing between Ukraine and Russia, the highest economic body of the United States warned that the conflict will bring more upward pressure on the country’s inflation, at their highest levels since 1982.
“Russia’s invasion of Ukraine is causing enormous human and economic hardship. The implications for the US economy are uncertain, but the invasion and related events are likely to create additional upward pressure on inflation and economic activity in the near term.”, the Fed said in a statement.
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The Federal Reserve also lowered expectations for US GDP growth from 4% to 2.8% for 2022.
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