Saturday, June 3, 2023

The US Federal Reserve decides whether to adjust its interest rates

The Federal Reserve of the United States (FED) will conclude today in Washington a meeting of its Federal Open Market Committee (FOMC) to decide on an increase in its reference interest rate, in a new attempt to subdue inflation and led this indicator . from a range of 0% to 0.25% a year ago to 4.75% to 5% today.

The whole environment surrounding Wall Street rules out that the agency will adjust the rate again by 25 basis points to bring the indicator to a range of 5% to 5.25% for the coming months and estimates that it will remain at this level until in the end. anus

Investors’ attention is focused on the prospects that the Fed will describe for the coming months and the signs that the chairman of the organization, Jerome Powell, can project during the afternoon conference.

Economists say Powell is likely hinting that the Fed is approaching an expected pause in its rate hikes.

However, it will not necessarily send a clear signal that this week’s hike will be the Fed’s last.

Instead, he will likely insist that further rate increases could occur if inflation would remain persistently high, well above the target rate of 2%.

Everything seems to indicate that the Fed will continue to focus on lowering inflation and putting aside the banking crisis since the collapse of the First Republic Bank at the end of the week is not expected to cover the interest rate adjustment.

At the Fed’s last meeting, in March, its officials predicted that they would implement another hike and leave rates unchanged until next year.

These forecasts are released once a quarter, so they won’t be updated until June.

However, seven of the Fed’s 18 directors forecast rates to exceed 5.1%, while only one forecast a lower rate.

The rate hikes have led to higher costs for many loans, from mortgages and car purchases to credit cards and corporate loans, and have increased the risk of a recession. (Telam)

Nation World News Desk
Nation World News Desk
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