The US Federal Reserve (Fed) maintained unchanged interest rate in a series of 5.25 to 5.50%, the highest level in 22 years. However, expects a further increase this year.
Why is the Fed expecting a new interest rate hike?
The decision was approved unanimously inside Monetary Policy Committee (FOMC) from Federal Reserve (Fed).
However, It is not the end of the curing cycle initiated by the central bank to control the inflation But plans to increase again this year.
In 2024 the Banco Central Expect rates in the order of 5.1% before 4.6% what was estimated in the month June.
It is important to note that the Federal Reserve doubled its GDP growth forecast in the United States 2.1% before 1 % estimated in June, As the economy advances at a “solid rhythm” said a statement.
As for inflation, that is characters they stay in 3.3% for 2023, 2.5% in 2024, and 2.2% in 2025.
Now it is Chairman of the Federal Reserve (Fed), Jerome Powell, reiterated this although inflation is losing strength back to “permanent form” to the target number, of 2%, “It will take some time”.
Why did the Federal Reserve raise its interest rate in the US?
The fed has raised its interest rate 11 times since March 2022 to achieve this Make loans more expensive, Reduce consumption and investments which puts upward pressure on prices.
In August the Consumer Price Index (IPC) was located in 3.7% in the Measurement after 12 months.
Meanwhile, the unemployment rate is came out of the historic low and positioned himself in it 3.8% thanks to new workers who the number of employed people grew.
In addition, consumption, the driving force of the economy, shows some signs of weakness, with expenses “moderate” in summer, according to the survey that leads the Federal Reserve (Fed).