Fed raises US interest rates by 0.25 percentage points

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New range for the benchmark interest rate is in the range of 4.5% to 4.75%. Headquarters of the Federal Reserve (Fed), US Central Bank. REUTERS/Joshua Roberts The Federal Reserve (Fed), the central bank of the United States, raised the country’s interest rates this Wednesday (1st) to a range of 4.5% to 4.75% – a high of 0 .25 percentage point. “The Committee anticipates that ongoing increases in the target range are appropriate to achieve a monetary policy stance tight enough to return inflation to 2% over time,” the FOMC statement said “In determining the extent of future increases within the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic-financial developments.” At the last meeting, the Federal Reserve (Fed, US central bank) had raised the interest rate benchmark by 0.50 percentage points, to a range of 4.25% to 4.5% per annum. The advance of interest rates in the United States occurs in a scenario of combating inflation. US consumer prices are experiencing a slowdown and are up 6.5% in the country in 2022, after reaching a peak of 9.1% in June. Effects in Brazil High interest rates in the United States tend to be reflected in an increase in the dollar exchange rate in Brazil, since the country’s currency is leaving, with the objective of seeking the best remuneration abroad. But this increase was already, in the jargon of investors, “priced” – that is, an increase in this proportion was already expected. Thus, the disclosure of the Fed’s decision did not provoke more accentuated movements in the dollar’s quotation here this Wednesday. The effects in Brazil, however, can also be long-term: the rise in interest rates in the US indicates a slowdown in the world economy in the coming months, as loans and investments become more expensive. This slowdown tends to have effects here in the form of a lower demand for Brazilian products and services — which may, however, help to reduce domestic inflation.

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