Part 7/15:
The US Federal Reserve is signaling a likely interest rate increase, with discussions of raising rates starting in March. While other countries, particularly emerging markets like Russia and Brazil, have already implemented rate hikes—Brazil raising interest rates from 2% to over 9%—the US has maintained near-zero rates.
The debate centers on how quickly and aggressively the Fed should tighten monetary policy. The current inflation rate, hovering around 7%, has prompted a shift towards potentially earlier and more pronounced rate hikes. There are concerns about stagflation—a combination of slow growth and high inflation—particularly if energy prices spike due to geopolitical tensions or supply shortages.