Fed to Continue Raising Rates; BBVA Reports Record Growth

This week, the US Fed announced it plans to continue raising interest rates at least until 2024 to control inflation. Meanwhile, BBVA recorded its highest profits in history thanks to more customers and digital sales.

Also, Alicia Arias, Director of Advisor Acquisition, GBM, told MBN how an early start to investment can help women safeguard their future. Sebastian Kreis, CEO and Co-founder, Xepelin, explained to MBN how supply chain financing programs help companies build stronger relationships.

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Breaking Barriers: Empowering Women to Invest

Women face a complex panorama when it comes to investing and supporting economic growth, explains Arias. While there are numerous benefits in incorporating women into the Mexican economy, the country faces several cultural, educational and operational changes to increase their participation. The low participation of women and the lack of equitable labor conditions hold back the country’s economic potential. “I want to invite all women to start investing. We know that 65% of women globally are banked, but in Mexico, only two out of 10 investors are women. We are excellent planners, administrators and also investors. It is time for women to start investing and become visionary women,” says Arias.

Supply Chain Financing Programs Help Build Relationships

Kreis explained to MBN how digitalization has allowed financing services to increase their scope. However, many of these options are still characterized by high-interest rates. Limited access to financing can weaken companies’ supply chains, as they lead to operational problems caused by the gap in aggregate supply and demand. As a result, payment issues can be a common source of tension and strain in supplier relationships for companies in Mexico. “This can lead to several problems, such as reduced quality of products or services and delayed deliveries and production schedules, things that can happen as a result of operational problems due to lack of working capital, or if the supplier feels undervalued or that it is not being treated fairly,” writes Kreis. 

Interest Rates Will Continue to Rise: Fed

The US Federal Reserve (Fed) will continue to raise interest rates as the country’s “disinflation” process has only just begun and “has a long way to go,” says Chairman Jerome Powell. His remarks come a week after the Fed announced its eighth consecutive quarter-point interest rate hike, confirming a slowdown in rate hikes. Powell added that the Fed’s objective is to gradually return inflation to 2%, which “is the global standard.” Despite the hikes, the US labor market has remained strong and over 500,000 jobs were created during January, which puts into question traditional economic theories that say that rate hikes strongly affect a country’s labor market. “If you look at history, there is some weakening of the labor market (when rates are raised) and that is still possible, but this cycle is different from other cycles. The labor market is strong because the economy is strong,” says Powell.

BBVA Registers Record-Breaking Profits, Adds 11 million Customers

In 2022, BBVA recorded its highest profits in history, which it attributed to an increase in customer acquisition and digital sales. The bank has also continued to pour efforts toward sustainable financing solutions for Mexican customers. During the year, BBVA added more than 11 million new customers globally while increasing its digital sales, which accounted for nearly 80% of total sales. The bank also channeled €50 billion (US$54.6 billion) into sustainable businesses. The increase in customers and digital sales led to a net attributable profit of €6.42 billion (US$6.98 billion) in 2022, an increase of 38% compared to the previous year.