Amid growing concerns about the trajectory of the US economy and despite ongoing banking crisisfederal bank from USA went yesterday to the 10th increase interest rates from dollar a little more than a year later. However, he left open the possibility that he could soon end this round of rising borrowing costs.

Deciding unanimously that the markets were essentially discounting, the Fed raised interest rates by 25 basis points. US borrowing costs are therefore between 5% and 5.25%, the highest level since August 2007. However, above all, this is the fastest transition to a restrictive monetary policy that has been decided fed since the 1980s, as it focuses on the need to slow growth and contain inflationary pressures. However, in its related statement, the federal bank emphasized that it would be closely monitoring whether further interest rate hikes would be required in the future, implying that this is no longer a given, as emphasized so far.

As financial analysts note, this cautious wording leaves open the possibility that the Fed will stop raising interest rates, but, above all, gives it the opportunity to have options and, if necessary, move to further increase the cost of borrowing. The requirement in this case would be to confront him inflation, which, despite this aggressive turn towards restrictive policies, remains at 4.6% and well above the 2% target. In his related statement, he emphasizes that in order to decide “to what extent further restrictive policy is needed to bring inflation back to 2%, he will take into account the cumulative effect of monetary policy, the lag in which monetary policy affects economic activity. and inflation, but also economic and financial development.”

The US Federal Reserve has stressed that it will closely monitor the need for further interest rate hikes.

So far, the US economy has shown signs of resilience, despite aggressive interest rate hikes that began more than a year ago. At the same time, the recent banking crisis is already trending towards slowing down lending and increasing the chances of a recession.

The Fed’s actions were largely discounted by the market, which was expecting another rate hike before the Fed decides to end this round of hikes. However, according to many economists, the consequences for the superpower’s economy will be immediate and possibly dramatic. By comparison, Paul Volcker’s decision to aggressively raise dollar interest rates in the early 1980s to nearly 20% drove US unemployment to over 10%. However, the Fed is not currently expected to act so aggressively, on the contrary, the authorities hope that it will achieve a “soft landing”, that is, a smooth slowdown that will allow inflation to de-escalate and return to normal levels, but without weakening the economy so much that many Americans have lost their jobs. The complexity of the venture has been exacerbated by the recent banking crisis with the failure of three major US banks and the intervention of regulators who took control of First Republic and turned it over to JPMorgan Chase.