It would be wise if the US central bank raised interest rates again today. That’s what ING Germany’s chief economist Carsten Brzeski thinks. Analysts fear that higher interest rates, intended to curb inflation, will lead to greater financial instability. Brzeski is still. “If you hold an interest rate break now, you’re sending a clear signal that you’re panicking.”
According to Brzeski, on the one hand it is important that the Fed presses, but at the same time maneuvers with prudence. And that translates into a 25 basis point rate hike. “If you do nothing now and there is a break in interest rates, then you are also sending a very clear signal that you are panicking. And I think just 25 basis points today would be a great compromise.”
“25 basis points would be a good compromise”
While a 25 basis point hike does not dent inflation, it does signal to the outside world that, on the one hand, the fight against inflation continues, but financial instability is also taken into account. ‘Obviously those 25 basis points are not the killer against inflation, because the Fed has already hiked interest rates massively. At the same time, it can also be said that that 25 basis points plus or minus will not guarantee that one bank or another will get into trouble or not.’
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Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
