On Wednesday evening, Polish time, the Federal Reserve’s Open Market Committee (FOMC), the Fed’s body that decides on monetary policy in the US, will decide on the level of interest rates. Economists forecast growth of 75 bp, which is three times higher than usual in previous years.
The interest rate hike cycle for Wielka Woda started in March of this year. The first jumps were symbolic, by 25 bp, but in June they already amounted to 75 bp. The reason for raising rates in the US is the same as in Europe: the fight against inflation. Consumer inflation in the US in June amounted to 9.1 percent. - much less than in Poland (more than 15 percent), but still the highest since November 1981.
Rates are likely to rise by 75bp.
Most analysts predict that the FOMC will raise rates by 75 basis points, but there are voices that it could be 100 basis points. Ten hours from now, rates will be in the range of 2.25 to 2.50 percent. Fed Chairman Jerome Powell’s conference on the state of the US economy and monetary policy will begin immediately after the presentation of the decision on interest rates.
Maneuvering your feet in a country like the US has an impact on the economies of other countries. Michal Stainiak, an analyst at XTB, estimated in his analysis that a 75 basis point rate hike, especially when combined with signals that the Fed is less inclined to further aggressive rate hikes, would be very good news for the zloty and other European currencies. “The US yield curve has long been inverted and indicative of a recession, which could dampen the further strength of the US currency. If the Fed considered the recent signals too strong and decided to move up 50 basis points, the zloty and the euro could rise in price very much,” he wrote.
The ghost of a technical recession in the US
The Business Insider website cites Ebury’s opinion that there is a risk of the US economy plunging into a technical recession (a fall in GDP for two quarters in a row). On Thursday, when we get the data on GDP for the second quarter, we will find out if these fears are confirmed.
Source: Wprost
