The Fed keeps rates on hold and plans to lower them until inflation reaches 2%

The Fed keeps rates on hold and plans to lower them until inflation reaches 2%

The Federal Open Market Committee (FOMC) of the United States Federal Reserve (Fed) has decided to keep interest rates in the target range between 5.25% and 5.5%, the highest level since January 2001, as the central bank Told in the report. Statement this Wednesday.

Thus, the institution has once again kept its monetary policy unchanged for the fourth consecutive meeting after the last increase in the currency’s price by 25 basis points last July.

“The Committee will continue to carefully assess incoming information, the changing environment and the balance of risks,” the central bank indicated.

Similarly, the decision-making body indicated that “it would not be appropriate to lower the target range until it has greater assurance that inflation is consistently returning toward 2%.”

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In assessing the appropriate stance of monetary policy, the Committee assured that it will continue to monitor the implications of the incoming data for the macroeconomic picture.

According to the Bureau of Economic Analysis (BEA), the world’s leading power economy experienced an annual growth of 4.9% of its GDP in the third quarter of 2023, compared to 2.1% in the previous quarter.

As far as the US labor market is concerned, it created 199,000 non-agricultural jobs during the month of November, reducing unemployment by two-tenths to 3.7%, according to the Labor Department’s Bureau of Labor Statistics.

Thus, the unemployment rate in the US once again reached the lowest level recorded in January and April, when it stood at 3.4%, its lowest rate since 1969.

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For its part, the personal consumption expenditures price index, the preferred variable by the Fed for monitoring inflation, was up 2.6% year-on-year in December, the same figure as the previous month. The monthly rate increased by 0.2% from the previous negative reading of 0.1%. The underlying variable closed at 2.9%, three tenths lower.