The possibility of a further increase in U.S. interest rates, July 27, 2022admin 27 July 2022
One of the most important events this week is undoubtedly the Federal Reserve meeting.
The Federal Reserve futures contract shows that we will have the possibility of an increase in interest rates to prevent inflation in the United States, and we will probably have a 75 basis point increase in the United States interbank interest rate, from 1.75% to 2.5%.
Since 1980, with the highest interest rates in the United States, the monetary policy of the United States has been towards lowering interest rates. But the rate of 2.5% since the beginning of 2019 is unprecedented.
In any case, the interest rate increase may not likely be the only excitement this week for economic activists, but perhaps traders will react to this news, and the stock markets, commodities such as gold and especially the dollar index will be subject to strong fluctuations, because if the interest rate increases to the level of 2.5 percent, it could pave the way for further increases in the coming months by the Federal Reserve.
Whether the increase of the interest rate is beneficial or not for the United States in the current situation is not up for debate today, but the increase of the interest rate to the level of 2.5% may help the interest rate to increase to 3.5% or even 4% by the end of the year.
The fact that raising the interest rate can open the way for producers, as well as economic activists in the United States is completely correct in terms of economic theories for a solution to this economic situation, but it will probably cause a sharp drop in the rate of satisfaction index. This will not be politically beneficial to the current administration and the Democratic Party of the United States.
However, we should keep in mind that the political and economic decisions of the governments may show good or bad results in the next governments. According to Kamala Harris, the rise of inflation is due to the right and wrong policies of the past government, and the current policies may affect the economy in the long term. this is not due to the inefficiency of the ruling party.
The people of the United States have shown that they care a lot about the current state of the U.S. Will the world see the role of Donald Trump again in future elections in the United States? This question has been on the minds of many economic analysts.