The US central bank expects inflation of 4.3% this year while lowering its forecast for economic growth to 2.8% from 4%.

The Federal Reserve (FED) of the United States raised the interest rate by a quarter point and signaled the possibility of more hikes in the remaining six meetings this year.

These and other actions seek to tackle the highest inflation in four decades even despite the increased risks to economic growth.

See also: New mortgage loans will be affected by high interest rates

Those responsible for US monetary policy led by Jerome Powell, president of the FED, decided by 8 votes in favor and one against, to increase the key rate between 0.25 and 0.50%.

This is the first increase approved since 2018, after two years of keeping borrowing costs close to zero in order to cushion the blow of the Covid-19 pandemic on the economy.

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It is expected that this decision will also impact the Mexican market since the last meeting of the Governing Board of the Bank of Mexico (Banxico), dated February 10, 2022, the majority decided to increase the target for the Interest Rate by 50 basis points. Interbank interest overnight at a level of 6.00%.

With this action, the monetary policy stance is adjusted to the trajectory required for inflation to converge to its 3% target within the forecast horizon.

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Original note