Jerome Powell, chairman of the US Federal Reserve. — © REUTERS
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The chairman of the US central bank does what everyone expected: he makes it seem that interest rates are rising soon.
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Stock analysts and economists worldwide looked forward to the announcement from the Federal Reserve, the US central bank, Wednesday evening. In it, chairman Jerome Powell does what everyone expected: he promises an interest rate hike. “With inflation well above 2 percent and a strong labor market, it will soon be justifiable to raise interest rates,” the central bank said in a statement.
“soon”
In such statements, every word counts, and it’s noticeable that Powell uses the word “soon.” Analysts expect this to happen as early as March. That would be the first increase since 2018.
The increase should serve to curb global inflation. It encourages people to save and to spend less on real estate, among other things, which is now driving prices up.
This American move is probably the harbinger of an interest rate hike here in Europe as well. Christine Lagarde, the president of the European Central Bank, held on to this until recently, but has recently relaxed her tone – every word counts in her communication too.
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