The Federal Reserve is increasing for the third time the rate of interest and this time is a giant increase compared to the past one that is expressing a sense of urgency to fight the stuborn high inflation surge and the persistence of recessive trends.
On Wednesday, September 21, 2022, the Federal Reserve announced the 3nd consecutive interest rate hike, raising its benchmark rate by 75 basis points, to a range of 3% to 3.25%. This decision to raise borrowing costs for all the financing from mortgages to credit card loans trying to harness the highest inflation known by the U.S. economy in four decades. This policy of gradual increase can establish a precedent that has not reach the level that the Fed is seeking to reach which will be the steepest rate hike since the early 1980s. Financiers and Policymakers predicted that a subsequent rate of 1.25% will take place this year and a quarter point for the year of 2023. In other words, there is not quick fix to these stubborn inflation that is born and rooted within sectors that are considered the most sensitive and national interest oriented one while they are controlled by foreign countries, in the first place Russia.
Other explanations were given by the Fed Chairman Jerome Powell who explained that labor market tight conditions necessitated keeping rates “restrictive for some time” to bring inflation back to the annual target of 2% of the bank, against 8.3% currently.
The other aspect to read between the lines is the recession that is already imploding within the labor market. In fact, several policymakers expect unemployment to reach 4.4% by the end of 2023, up from 3.7% currently, an increase large enough to implement for good a recession.
Major indexes ended lower, after veering wildly on Powell’s remarks, with the Dow Jones Industrial Average falling more than 500 points, or 1.7%.
The Impact of the Decisions of the European Central Bank
Invitation to the European Recession and Failures of the European Central Bank
Several months earlier, I had written articles on the soft descent into recession through the positions of Madame Christine Lagarde and the lack of financial clarity of the decisions she had continued to promote which gave the impression that she has not completely let go of her bad reactions and recommendations made to developing countries during her presence at the head of the International Monetary Fund, which she inherited as a gift following an accident in the history of the New York Waltzes by Strauss.
Mrs Christine Lagarde must take on a purely European mission and not imitate the Federal Reserve Bank of New York and follow the trajectory traced by the American authorities with regard to the current conflicting economic situation into which Europe in the aftermath of the War between Russia and Ukraine.
Destroy to Build, Anarchy in Human Nature Driven by Profit at All Costs and in All Directions with no alternative but the Race for Positioning in Pole Position and at the Vanguard of the Market to effectively direct, orient and dictate the very conditions proper of this Market which should be open given the ultra-liberal ideology which structures it internally as it conditions the pace of its external relations.
Several of these aspects I had discussed in these articles:
Fighting the Recession
Fighting Recession with a Sword that has Two Cutting Edges: Unemployment and Interest Rate
Have you being recently fired?
This may leave you feeling like your career path is suddenly falling like a Castle of Cards.
Symptômes de Récession aux Etats Unis
Economie Déprimée, Inflation, Taux d’Intérêts en Hausse et Licenciements – Les Raisons de la Colère Populaire et les Dérivées Mondiales des Sanctions Economiques des USA et de l’Union Européenne la Russie
World Economy Spectrum: Tandem of Inflation and Recession
Updated on 9/10/2022 – Initially published on June 26 6:46 pm
The State of the World and the Global Economy
Europe Hindered by Russia Hydrocarbons
The Boomerang Effect of the European Commission Sanctions against Russia
New World Order and New Global Pax Americana
East Asia, the developmental state and globalization
Asian- Pacific Regional Comprehensive Economic Partnership
USA, EU and China: Actions and Reactions toward Russia – Ukraine War
Russia★China & Europe★USA
Changing World Economy
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