FOMC will decide on interest rate

Next week the FOMC will meet again to determine the roadmap for the coming months in relation to the economic projections and the decision on interest rates.

The announcement will be made by Fed Chairman Jerome Powell and interest rates are expected to remain between 0.00% and 0.25%.

Taking into account that the decision is based on inflationary levels, with the objective set at around 2%, given that it has increased moderately by 0.4% for the month of February, no major changes are expected on the decision.

However, the acceleration of inflation in recent months has led to speculation that inflation will advance towards the target projected by the FED, which may raise interest rates earlier than expected. In line with this, the producer price index published today showed an increase of 0.5% for the month of February.

The committee is in a different context than the last meeting, since the next meeting will be marked by the moderate advance in inflation, the increase in the yields of the treasury bonds of the last hours, the growth in employment greater than expected and approval of the Biden stimulus bill. These factors, although precipitous, create a new scenario that could foresee a change in the decisions and implementations of the entity.

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