The increase could be 0.50 or even 0.75. The United States Federal Reserve has raised interest rates by 0.75 to try to halt the rise in inflation, and fears the decision will lead to a recession: “It strengthens the dollar and weakens the rest of the currency.” “, he said. warned.
Euskaraz irakurri: Europako Banku Zentralak berriro ere igoko ditu interes-tasak irailean, Niko Cuenca ekonomialariaren iritziz
The European Central Bank Continue weather the interest rates in September, the 0.50 and even the 0.75, according to the forecast of economist Niko Cuenca. As he recalled this Thursday in an interview he had about the Euskadi Irratia program Faktoria, the US Federal Reserve announced a 0.75 rate hike on Wednesday, aimed at halting rising inflation; In the economist’s words, there are fears that this decision will lead to a recession: “It strengthens the dollar and weakens the rest of the currency,” he warned.
“There hasn’t been such an increase since 1981,” Cuenca explained of the Federal Reserve’s decision, “since Ronald Reagan was president of the United States, and at that time a war was the trigger.” Then the rise brought a recession, “in the United States and around the world”; on this occasion, in the opinion of Cuenca, and taking into account that an even greater increase was forecast, “the Federal Reserve has acted cautiously. It is based on the strength of the US labor market. The indicators that determine the output and expenditure are reduced.
Cuenca is clear that there will be more increases, “and that what the Federal Reserve determines affects the whole world.” In addition to weakening currencies that are not the dollar, this rise will have another consequence: “Countries with high external debt, including the most deprived countries, will have to pay higher interest rates. If the dollar strengthens, they will have more problems .”
As for Europe, as most of the energy imported is paid in dollars, Cuenca expects the European Central Bank to raise interest rates in September to try to strengthen the euro; that increase could be 0.50, “and even 0.75,” he said.
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Source: EITB
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
