Relief for Argentina: the Federal Reserve of the USA will not raise the rate throughout the year

The Federal Reserve (Fed) of the United States decided today to keep unchanged the interest rates that regulate the cost of money, within a range of between 2.25% and 2.5%, and in the short term does not plan to carry forward new increases – as it happened in 2018 – because the outlook for economic growth has weakened in recent months.

The news brought relief to financial markets around the world, because a rise in US interest rates. It forces us to recompose investment portfolios, affecting especially those with the greatest risk.

That is why for Argentina, a country that is vulnerable financially if there are any, the news was very well received. In fact, the dollar mitigated its climb, the bonds that were pointing down recovered and the actions did the same.

Argentine officials also showed relief at the news. The progress of the economic and especially monetary program requires extreme global calm, because a small vibration in the world here can feel like an earthquake.

“Economic growth has slowed down from its solid rate recorded in the last quarter of last year,” the Fed said in a statement issued at the end of its two-day monetary policy meeting.

Specifically, the Central Bank of the United States lowered the growth prospects to 2.1% for the current year, compared to the 2.3% projected last December.

In that framework, the president of the agency, Jerome Powell, acknowledged “it may be a while before we need to adjust monetary policy,” Powell said at a press conference, following the announcement made with the decision taken by the Committee Federal Open Market (FOMC).

According to the specialists, the words of Powell could mean that the FED will not return to adjust the interest rate in which it remains of 2019, a scenario different from the one of three months back.

The Fed, in its press release, insisted that the economic outlook advises to continue with the “patient” approach when it comes to continuing with the gradual plan to raise the price of money, the EFE agency said.

The US economy remains strong, with an unemployment rate in February of 3.8%.

However, in February the lowest number of new jobs in the last 17 months was registered, with a total of 20,000, which experts considered as the last sign of a broader slowdown in the country’s economy.

In fact, the first calculation of US economic growth in 2018 was 2.9%, the highest rate since 2015.

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Nora Barnes

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