The US Federal Reserve has no intention of loosening its restrictive monetary policy. Tightening it to the point of raising interest rates for the third time so far this year.
With the recent rise in rates of 0.75%, they have reached the highest level in the last 10 years. However, this increase is relatively low compared to the harsh restrictions that are planned for the subsequent periods, with the objective set for 2022 being up to a 4.4% increase.
After the meeting held yesterday, the message of reducing the measures until inflation touches at least a level of 2% is still being pushed. A scenario that looks increasingly unlikely.
As far as the labor market is concerned, at the moment there are no signs of a sharp drop in terms of unemployment. It is currently estimated that there are approximately 2 jobs for every person looking for work in the US. However, this data could vary throughout the year.
A priori, another increase of around 125 basis points is expected for the next two meetings in 2022. As 1 basis point is equivalent to 0.01%, we would be talking about a potential rise of 1.25%.
Jerome Powell said: “Restoring price stability is essential to set the stage for achieving maximum employment and stable prices over the long run. We will keep at it until we are confident the job is done”.
The outlook does not seem to indicate a significant improvement for the remainder of the year. In the words of Powell himself, their determination will not waiver in tightening monetary policy even more if the inflationary data does not come close to the 5.4% that they intend to achieve by the end of 2022.
For the moment Bitcoin has not shown any great movements in response to the latest events. But it is yet to be seen what will happen in the long term as the Fed continues to tighten its measures.