That United States Federal Reserve (FED) confirmed all previous forecasts and hiked interest rates by 0.75 points, an aggressive monetary policy that reflected inflation of 8.6% that marked another 40-year record in the nation.
It’s the largest of its kind since 1994, in a decision that the Fed said reflected “supply and demand imbalances, the surge in energy and broader pressures on prices.”
Juan José Marthans, director of the economics section of the PAD, School of Management at the University of Piura, noted that this increase is both in line with inflation and well below United States of America, which exceeds 8%, and the inflation expectation of over 4%. These two indicators are telling us that the real level of the interest rate is still quite low and still in an expansionary zone.
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“What has been announced is some sort of adjustment, a signal to try and reduce inflation expectations more than inflation. From that point of view, it’s understandable,” he sent.
Accordingly, the Central Reserve Bank (BCR) in our country last week raised the reference interest rate by 50 basis points from 5% to 5.50%, a measure that was decided for the tenth consecutive month amid inflation looming at 8.09% for the month of May.
For Marthaner, however, this decision by the FED should not have any impact on the exchange rate in Peru, since our economy remains isolated precisely because of the progressive increases in the reference rate, in addition to a level of risk that sovereignly still exists – despite the deterioration suffered over the last 12 months has, he explains—and the fiscal strength the government has inherited, which is still internationally recognized.
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“There shouldn’t be high volatility. If so, we will show the international front that despite the political noise, macro strengths remain,” he affirmed.
The key
Trend. For the Credicorp Capital team, the BCRPin its attempt to anchor 12-month inflation expectations within the target range (1-3%), it will lift its rate to 6.25 or 6.50% this year.
Worked. The Fed expects US unemployment to rise to 3.7% by the end of the year and 4.1% by 2024.