{"id":49257,"date":"2024-05-28T17:00:00","date_gmt":"2024-05-28T15:00:00","guid":{"rendered":"https:\/\/www.11onze.cat\/?p=49257"},"modified":"2024-05-28T17:03:00","modified_gmt":"2024-05-28T15:03:00","slug":"federal-reserve-role-global-economy","status":"publish","type":"post","link":"https:\/\/www.11onze.cat\/en\/magazine\/federal-reserve-role-global-economy\/","title":{"rendered":"The Federal Reserve\u2019s role in the global economy"},"content":{"rendered":"
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The Fed, as the central bank of the United States, is responsible for stabilising the US economy, managing monetary policy and overseeing all economic activities in the country. Its decisions not only affect the US but also have an impact on the global economy.<\/b><\/h3>\n

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Stock markets are watching the Federal Reserve’s meeting taking place between today and tomorrow. The rate-setting panel will announce its decision on 20 March. Many investors do not expect any surprises regarding the decision and give a <\/span>99% probability that it will leave rates unchanged<\/b> at 5.25% to 5.5%.<\/span><\/p>\n

On Thursday 7, Jerome Powell, chairman of the Federal Reserve, indicated that<\/span> interest rate cuts may not be far off if there is “cooperation” by the inflation<\/b>, but declined to give a specific timetable for when he expects them to occur, which could be delayed until the summer.<\/span><\/p>\n

Holding higher rates for a little longer could <\/span>keep pressure on the economy, protecting it against the risk of inflation picking up again<\/b>. The latest inflation data indicates that the pace of price increases continues to moderate, although the CPI shocked markets when it was higher than expected in January.<\/span><\/p>\n

On the other hand, the US is in an election year and <\/span>Democrats want a rate cut to further boost the economy.<\/b> At the same time, Donald Trump sees it as interference from the White House and threatens to change the Fed chairman when he regains the presidency if it “helps” his rival.<\/span><\/p>\n

In any case, investors’ attention remains focused on whether the central bank will guide the expected timing of <\/span>what would be the first-rate cut since March 2020<\/b>, when the economy was in free fall because of the pandemic, which led the Fed to slash borrowing costs.<\/span><\/p>\n

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