Published March 22. 2023 7:24 pm est
Editor in Chief,
NEWSMOVESMARKETSFOREX ®
- Today in the News FED Raise interest rates by 0.25 bases points to 5 percent
- US. Economy Slowed Significantly in 2022, Housing Sectors still remains weak along with higher Interest rates, Labor market remains extremely tight, Job vacancies remains very high
- FED Creates the Banking Term Funding program to provide needed Liquidity in Banking Sector
- Banks that hold safe and liquid assets can borrow against those reserves at par
- Potential U.S. Banking Crisis two U.S. Tech Banks were bail out by Regulators on last week Silicon Valley Bank and First Republic Bank
- President Biden Administration assured the American people that it would guarantee uninsured deposits at both banks
- Swiss National Bank, SNB Interest rate decision on Thursday, March 23, 2023 at 1:00 am EST
- Bank of England, BoE Interest rate decision on Thursday, March 23, 2023 at 3:00am EST
- Euro Leaders Summit will take place on Thursday, March 23 2023 at 1:00pn
Wednesday’s Edition:
U.S. Economy Inflation Pressures remains to run high 1st quarter 2023 –
On March 22, 2023, the Federal Reserve, led by Chair Jerome Powell, announced a 0.25% bases point hike raising interest rates to 5 percent. This decision was made in response to the growing concern over 
inflationary pressures in the economy, as well as the need to maintain a balance between economic growth and stability.
inflationary pressures in the economy, as well as the need to maintain a balance between economic growth and stability.Interest rates are one of the key tools that the Federal Reserve uses to control the economy. When the economy is sluggish, the Federal Reserve may lower interest rates to encourage borrowing and spending, which can stimulate economic growth. Conversely, when the economy is growing too quickly and inflationary pressures are building, the Federal Reserve may raise interest rates to slow down borrowing and spending, which can help to prevent inflation from spiraling out of control.
The March 22, 2023 interest rate hike is a sign that the Federal Reserve is concerned about inflationary pressures in the economy. Inflation occurs when the prices of goods and services rise over time, which can erode the purchasing power of consumers and businesses. Inflation can be caused by a variety of factors, including rising input costs, supply chain disruptions, and increasing demand for goods and services.
Fed Chair Powell states that “FOMC expects supply and demand condition’s in the labor market to come in to better balance over time easing upward pressures on wages and prices. Inflation pressures continue to run high.”
One of the main drivers of inflation in recent years has been the unprecedented fiscal and monetary stimulus measures that have been implemented to combat the economic fallout from the COVID-19 pandemic. These measures have injected trillions of dollars into the economy, which has led to a surge in demand for goods and services. This surge in demand has put upward pressure on prices, which has contributed to the inflationary pressures that the Federal Reserve is currently trying to address.
The decision to raise interest rates is not without risks. Higher interest rates can make borrowing more expensive, which can slow down economic growth and potentially lead to a recession. Additionally, higher interest rates can put upward pressure on the value of the US dollar, which can make US exports more expensive and less competitive on the global market.
Despite these risks, the Federal Reserve has deemed the interest rate hike necessary to address the growing inflationary pressures in the economy. The 0.25% increase is a relatively modest move, but it sends a strong signal to the market that the Federal Reserve is taking inflation seriously and is willing to take action to address it.
The impact of the interest rate hike is likely to be felt across the economy. Consumers may see higher borrowing costs for mortgages, credit cards, and other loans. Businesses may also see higher borrowing costs, which could make it more difficult to invest in new projects and expand operations. However, the impact of the interest rate hike is likely to be gradual, and the Federal Reserve will continue to monitor the economy closely to ensure that it remains on a stable path.
One potential upside of the interest rate hike is that it could help to cool down the housing market, which has been experiencing a surge in demand and rising prices in recent months. Higher interest rates could make it more expensive for buyers to borrow money for a mortgage, which could slow down demand and potentially lead to more stable prices.
Overall, the decision to raise interest rates on March 22, 2023 is a signal that the Federal Reserve is taking inflation seriously and is willing to take action to address it. While there are risks associated with higher interest rates, the Federal Reserve has deemed this move necessary to maintain a balance between economic growth and stability. The impact of the interest rate hike is likely to be felt across the economy, but the Federal Reserve will continue to monitor the situation closely and adjust policy as needed to ensure that the economy remains on a stable path.
Investor’s across the globe are awaiting the major G7 Central Bank Monetary policy Interest rates decision schedule for this week. Please be sure to catch all the latest High Impact Major Market moving News Events on the Forex Weekly Economic Events Recap March 19, 2023.
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