exceed 5%, it hasn’t happened since 2007- Corriere.it

Interest rates in the US are over 5%. Confirming market expectations, the Federal Reserve increased the cost of money by 0.25%. This is the tenth consecutive increase, which brought the Feds funds, i.e. the reference rates, to the range of 5-5.25%, the highest level since mid-2007.

The bankruptcy of the third American bank in less than two metersesi (Silicon Valley Bank and Signature Bank of New York were closed by the Fdci in mid-March), continues to agitate investors, penalizing above all the securities of American regional institutions, despite reassurances that the healthy and resilient banking system, like the president of the Fed, Jerome Powell, had said during the press conference following the monetary policy meeting of 21 and 22 March.

The economy is also worrying. The market fears a new credit crunch by the banks, who are preparing to cut loans and mortgages to households and businesses, due to the tightening of rules on supervision, anticipated in the conclusions of the report conducted by the Fed vice president for banking supervision, Michael Barr, on the carc of Silicon Valley Bank. Added to this is the pressure on prices. US inflation in March it fell to 5% from 6% in February, but remains well away from the 2% target dthe central bankWhile US growth is slowing, as he signaled the rise of just 1.1% of GDP in the first quarter of this yearafter the +2.6% recorded in the last three months of 2022.

Uncertainty and the prospect of a recession, as feared by the drop in oil prices, have therefore convinced Wall Street that this will be the last rate hike and in the fourth quarter the Fed will make a U-turn and go back to chopping the cost of money. Thus, pending Powell’s words, American stock markets remained in positive territory. A plus sign also for the European stock exchanges, after the fall on Tuesday.