If the predictions come true, The Federal Reserve will announce this Wednesday a rise in interest rates of 75 basis points, to place them in a range between 3.75% and 4.0%. It will be the fourth time in a row that the price of money in the US has risen by this amount, an aggressive tightening of monetary policy that will have consequences beyond US borders.
The main impact for Europe and Spain has to do with the rise in the dollar. The single currency, which had started the year above 1.20 dollars, is now below parity against the greenback, at a crossing today of 0.9906 dollars for each euro.
Is strong depreciation of the euro, which already exceeds 20% in the yearfavors European competitiveness on paper: if fewer dollars are needed to buy a euro, the exports of European companies are favored, since it is cheaper to buy in the Old Continent.
However, it is a very heavy burden at a time like the current global energy crisis and the rise in raw materials as a result of the war in Ukraine. Most commodities, including oil, are bought in dollarsso we Europeans are being forced to pay higher prices.
The rise in the dollar thus raises inflation even more, which reached a record in the eurozone of 10.7% in October, forcing the European Central Bank (ECB) to also raise its tone and raise interest rates, there already yes with a direct impact on the financing costs of companies and individuals.
The Fed’s moves are also having a very strong impact on stock markets around the world, as it has triggered fears that the global economy is headed for a recession.