Hello friends of Project HOPE, Very good day to everyone. Today I want to talk about a topic that may seem technical to many, but that actually affects us all: interest rates. Yes, that sometimes sounds complicated, but it defines much of what happens in the economy and in our pockets.
It turns out that rates remained at 4.25%, and although for some it is still a bit high, the truth is that this generates certainty in the market . Let's see, when rates rise too much, loans become more expensive, people spend less, companies invest less and, in general, everything slows down. But when they go down too much, there can be excess money circulating, which causes inflation and currency devaluation. So, keeping them at this level means that there is a balance, a middle point that allows stability.
Now, there is an interesting issue behind this, and that is that in developed countries monetary policy is usually predictable, the rules are followed, the decisions have logic and, in general, there is confidence in the system. But in Latin America, things are not so simple. Here any economic decision can come with an unexpected turn, with sudden changes that affect everyone.
And of course, the stability of rates also has to do with the perception of risk. In strong economies, people trust in the financial system, in the solidity of the country, that their money is safe. On the other hand, in our countries, with governments that change the rules of the game every four years and with levels of corruption that are a joke, people distrust. And what happens when there is distrust? That money is gone, investments decrease and uncertainty skyrockets.
So, is it a good thing that rates remain the same? Yes, because it gives some stability to an environment that is already quite unstable. But the real question is whether governments are going to take advantage of this stability to do things well or if, as always, they will limit themselves to taking short-term measures without thinking about the future.
I would like to know what you think. Do you think this stability in rates really benefits people or is it just a temporary respite before the next imbalance?
Thanks for talking about these topics and keeping us updated. This is important financial information. I expect the US stock market to move sideways for a month. I think Tesla, BRK.B or Coinbase shares will not change in price for a month.
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