Economist: The US Federal Reserve’s reading of the economic scene is wrong from the beginning and the world is paying the price
Economic analyst: The US Federal Reserve’s persistence in policies Quantitative easing has brought the world to where we are now
An economist explains the impact of the US Federal Reserve raising interest rates on gold and stock markets
Economist: the same policies What the US Federal Reserve followed during Corona was the cause of the financial crisis 2008
Mohamed Abdel-Wahab, an economic analyst and financial advisor to the Arab Union for Development and Development of the Council of Economic Unity of the League of Arab States, confirmed that Eyes are turning today, amid a state of anticipation, to the US Federal Reserve meeting, where the Federal Reserve is facing a difficult test in an attempt to rein in inflation, which reached its highest levels since
years by using one of its most important tools, which is raising interest rates. Enough to reduce demand and try to balance between reducing demand some kind and keeping it so that it does not fall into the trap of stagnation around which economies are hovering in different countries of the world now, especially since inflation is caused not only by an increase in Money supply and high demand, but the most important is the high cost of raw materials.
Will the Fed raise its interest after 25 a year of stabilization?
(Abdel-Wahab clarified that the Federal Reserve’s current problem is not only facing inflation, but rather facing the economic effects of the Russian-Ukrainian war and its repercussions on the American and global economy, and the significant rises witnessed in the markets for commodities and raw materials, especially oil materials.
He pointed out that the rise in energy bills with the decline in stock and credit markets may lead to a drain on demand by consumers, which will increase the chances of a recession that has become a reality in many markets in various countries of the world.
Abdel-Wahab added, that raising the interest rate by 25 one basis point will be a decision, I think, and as seen by many specialists, is useless and will not be able to stop inflation, which, as we explained, is inflation resulting from a rise In the inputs of production processes and not inflation resulting from high demand and the availability of liquidity in the hands of consumers as usual.
Abdel-Wahab revealed that the US Federal Reserve misread the economic scene Significantly when he continued to excessively use the policy of quantitative easing during the Corona crisis, as this policy is borne by the Fed officials alone as a result of their excessive policies, which the world pays greatly its tax today, noting that Powell’s announcement more than once that the inflation situation is a transient situation The biggest mistake and manipulation of the global economy, and then the return and recognition that the central bank completely misread the inflation problem as transient.
Abdel-Wahab continued: “It is expected that the US Federal This year’s Federal Open Market Committee meetings, along with the as yet unannounced $8.9 trillion budget cut, may bear fruit in reducing the liquidity of financial institutions, but on the contrary, there will be dire consequences for the bond and stock markets.”
Abdel-Wahab said: “It is clear to us that inflation will not respond significantly to these policies, which will push the Federal Reserve to raise interest rates to large rates, perhaps the largest in the history of the Federal The result is more stagnation that will lead the global economy into a state of great depression, perhaps that will be the worst case in human history.
Abdul-Wahhab stressed that the world By the end of the year, it will witness a state of economic downturn if the military turmoil between Russia and Ukraine continues, and if we see a new player on the battlefield. The financial advisor to the Arab Union for Development and Development confirmed that raising the interest rate by the expected amount of 25 point will not have a significant impact on the markets that may deal with the matter temporarily, but raising the interest by 50 A point or more will have a negative impact on the performance of the stock and gold markets, whose decline will be limited with 25 a point and will be somewhat large when interest is raised 50 a point or more, indicating that the influence will soon fade and return to higher levels as a result of the turmoil and uncertainty in which the world lives today.
Abdel Wahab added, that Taking wrong decisions and a wrong reading of the global economic scene, it is natural that the result will be the situation in which we live today, stressing that the US Federal In 2008, where the policies of Alan Greenspan, then the Federal Reserve, had the same result, as the causes were many and the result was the same. So when will he let the US Federal Reserve control the global scene?!