American banking system explains
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US Federal Reserve Decides to Hold Interest Rates: What This Means for Argentina
Officials at the US monetary authority have maintained the possibility of cuts through 2024
The central bank reiterated its intention to continue reducing its monthly balance sheet by $95 billion.
From the consulting firm Ballance, indicated that "the update of the economic projections was one of the most expected aspects, especially after the inflation elasticity in the first two months of the year."
“Members of the Modi Policy Committee expect monetary policy rates of 4.6% in 2024, 3.9%, and 3.1% in 2025 and 2026, above the 3.6 and 2.9% indicated in the December meeting for 2025 and 2026, respectively. On the inflation side, Fed members left their estimate for 2024 unchanged at 2.4%," the report added.
What effect could it have on Argentina?
Regarding the implications this FED decision could have for Argentina, Andres Reschini from F2 Soluciones Financieras commented to PERFIL that “three rate cuts of 0.75 pp are called for in 2024. If a smaller cut were planned, the rate at the end of The year is going to be higher than expected and this will negatively affect asset valuations, financing costs, and especially the prices of products that Argentina exports."
"The risk was less than expected and it didn't happen. There will probably still be three cuts. Regardless, the dynamics of US inflation will continue to be analyzed,” added the economist.
For his part, former Argentine Central Bank President Martin Redrado commented: "Today's meeting of the @federalreserve Open Market Committee makes it clear that a new downward cycle of global interest rates is beginning."
"It matters little which central bank starts the process first. What matters is the trend. And that's good for Argentina," added the economist in his X account.
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