Monday , September 26 2022

The boss of the Fed defend the & # 39; interest rates rising


The administration & # 39; the US has confirmed strong economic growth & # 39; 3.5% advance in the third quarter despite domestic consumption, traditional engine & # 39; the world's largest economy, less supported.

And, Jerome Powell still looks solid pace all year plus & # 39; & # 39 rate; historically low unemployment. These data further support the idea that, for the time being, increases in rate & # 39; interest after the three already approved this year.

"The interest rates are always low if we take the historical criteria and remain just below (…) level to be neutral to the economy, ie without stimulation, nor slows growth", said in a speech to New York Economic Club.

These comments, coming after the harsh criticism of the president accused the Federal Federation & # 39; errors by increasing its rates, were immediately welcomed in the markets awaiting details of this rate "neutral" and wanted to see in the famous Powell shows a decrease in the pace of & # 39; the rate tightening.

The specialists are divided on what is most b & # 39; concrete way this rate as a given economy. Regarding the United States, economists cite rate & # 39; about 3%. The prime interest rate set by the Fed is currently & # 39; 2.25%.

Jerome Powell also recalled that the Monetary Committee estimated that about three years ago "extraordinarily low rates" m & # 39; obsolete housing interests, businesses, savers and borrowers.

He further stresses that the step & # 39; "gradual increase" in rates was designed to balance two risks: neither too much stimulation or reduction. He also found that Fed officials scrutinized the economic data carefully before taking any decision.

"The Fed is near the plate", but was condemned Tuesday Donald Trump, Jerome Powell regrets appointed to this key position for the economy.

Trump is & # 39; far from the only one to worry about rates & # 39; Fed cut interest after nearly a decade & # 39; practically free money.

Some economists fear that this policy affects almost perfect economy, with sustained GDP growth, unemployment & # 39; 3.7%, the lowest in 48 years, and controlled inflation.

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