There will be no relief from the high interest rates, Fed Reserve chairman gave this indication

Interest Rate Hike: Central Banks around the world have been continuously raising interest rates to control the record high inflation of several decades. During the last one year, almost all major economies have gone through a sharp increase in interest rates. After this, it seemed that the pace of increase in interest rates might slow down in the new year. However, now this hope is weakening.

Effect of this trend of inflation

The US Central Bank Federal Reserve has given a clear indication about this. Federal Reserve Chairman Jerome Powell said on Tuesday that interest rates could rise faster than the central bank’s policy makers had estimated. He also talked about the economy. Powell blamed the trend instead of inflation for this compulsion to increase interest rates.

Expensive rates will have this effect

The Fed Reserve Chairman said that the signs of softening of inflation at the end of last year i.e. 2022 are reversing in this year i.e. 2023. For this, he cited the initial figures of inflation for 2023. He said that inflation has started rising again, which had started coming down a few months ago. In such a situation, it is necessary to control it and for this interest rates will have to be increased. If the interest rates are increased, then it will have a direct effect on the growth rate of the economy. Expensive interest rates can increase the challenges on the economic growth front.

This is Powell’s compulsion

Powell is scheduled to appear before the US Parliament this week. Earlier, he said, the latest economic data has come out different from the estimate, which ultimately indicates that the increase in interest rates may be higher than earlier estimates. If these figures say that it is necessary to increase the interest rates faster, then we have to be ready to increase its speed.

Reserve Bank will also be affected

Let us tell you that the decisions of the American Central Bank i.e. Federal Reserve have an impact on all the Central Banks around the world and the Reserve Bank is also not untouched by this. Due to the unexpected steps of the Federal Reserve, in May last year, the Reserve Bank suddenly called a meeting of the MPC and started increasing the interest rates. Since then, the repo rate has been increased in several phases till now. It was believed that now the Reserve Bank can put a brake on the trend of increasing the interest rates. However, Powell’s gesture has weakened this estimate. This means that the Reserve Bank may also be forced to increase the interest rates further. If this happens then people will have to face the problem of more expensive interest now.