The dollar hit a 20-year high on the heels of the Federal Reserve’s decision to raise interest rates (Getty)
It seems that the strong dollar phenomenon will accompany us for many years, The American currency It is getting stronger day by day, due to several factors, notably the interest rate, which has become the highest since 2008, the influx of money into the Wall Street markets and the strong demand for link And US Treasuries due to high yields, rising geopolitical risks around the world, and escalating economic crises, especially inflation and energy.
More importantly, it is weak coins Global competition, including the euro and the pound, including the yen, which has also fallen to its lowest level in 24 years, has pushed Central bank The Japanese government intervened for the first time since 1998 to support it against the dollar and stop its bleeding and continued decline.
Despite its crises, US economy To the fore is the rise in the rate of inflation, but the dollar has reached its highest level in the last 20 years, supported by the Federal Reserve’s decision to increase the rate of inflation interest rateIt is expected to strengthen in the next period with the continuation of the monetary tightening policy aimed at countering high inflation.
The dollar reached its highest level in 20 years, supported by the Federal Reserve’s decision to raise interest rates
At a time when the ink of the Federal Reserve’s decision to raise interest rates from 0.75% to 3% and 3.25%, up from around zero last March, news emerged from renowned banks investments which plan to continue the rate hike policy in the coming months, and even reach the level of 5% by next March and perhaps even more, predicted by two of the largest banks in the world, namely Bank of America and Deutsche Bank of Germany.
Indeed, a number of large international investors have gone even further, expecting a big jump in the dollar yield that it hadn’t reached before, as predicted by investor Mark Mobius, who just days ago said the Fed could raise rates. of interest at 9%, in the context of the battle against inflation, which is a price that paralyzes the American economy, drowning the economies of emerging and developing countries in seas of debt, currency crash, inflation and perhaps bankruptcy and financial stumbling block, especially as these countries rely heavily on external debt to bridge funding gaps and budget deficits.
Hence, the dollar interest rate does not stop at this high level after the Federal Reserve painted a hazy and possibly gloomy picture of the US economy in a statement released after the bank’s meeting on Tuesday and Wednesday, as it drastically lowered rates. his forecasts for economic growth in the United States, while raising estimates of the unemployment rate and inflation.
The Federal Reserve could raise interest rates to 9%, in the context of the battle against inflation, a price that paralyzes the American economy
He also expected GDP growth of only 0.2% this year and reduced his vision for economic growth over the next two years to 1.2% and 1.7%.
The Fed raised its forecast for the unemployment rate this year to 3.8% and also expected the unemployment rate to reach 4.4% over the next two years. As for inflation, the PCE price index is expected to rise by 5.4%.
The US economy is headed for stagflation, with rising prices and rising cost of living and economic pain for millions of American businesses and families, increasing the cost of home, automobile and credit card loans.
As long as the world’s largest and most important economy not only sneezes, but is expected to bleed heavily, the dollar will continue to shine, and here it will say peace to emerging and developing countries that depend on external debt, as they will. plunging into economic crises, market depression, corporate bankruptcy and collective bankruptcy.
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