Without surprises and in line with what was expected in the markets, the US Federal Reserve (Fed) decided remained unchanged, This Wednesday, the reference interest rate. This is the second meeting in a row that the North American central bank has chosen to keep interest rates in a range of 5.25% to 5.5%, which still represents the highest levels in 22 years.
Thus, after 11 consecutive increases in the benchmark interest rate since March 2022, the two-day meeting of the Governors Committee that decides the monetary policy of the world’s largest economy, ended with a second consecutive pause in terms of the cost of money.
However, in September, the Jerome Powell-led institution signaled its intention to enact another interest rate increase by the end of this year, and even taking into account that US inflation remained at 3.4% last September – well. Above the 2% target set by the Fed – and that the economy grew at a “strong pace” in the third quarter – the central bank has, however, chosen not to change interest rates yet.
The Fed is waiting to see how continued restrictive monetary policy will continue to impact the financial capacity and access to credit of households and businesses, especially economic activity and inflation. Especially since the true extent of the effects of the restrictive monetary policy adopted in the United States “remains uncertain,” says the statement, which highlights that in the near future the Federal Reserve will continue to “carefully pay attention” to the risks associated with rising interest rates. Inflation levels.
The Fed promises to “continue to evaluate additional information and its implications for monetary policy,” thus leaving open the possibility of another increase in interest rates to ensure the target, now confirmed, of 2% inflation.
Federal Reserve It will meet again on December 12 and 13 To determine the direction of interest rates in the United States.
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