Washington, September 18 (AP). – Since then Federal Reserve (Fed) met by Last time in July The Business has decided on that Direction his officials wanted: Inflation has slowed -Yes OK not as much as many Americans would like– Him Economic growth steam good opportunity and that The job market is cooling down.
If they meet again this week, chances are good Officer decide that You can wait and see if the trend continues. Therefore, It is almost certain that they will not change the reference interest rate when the meeting ends on Wednesday.
The decline in inflation suggests that the US Federal Reserve is nearing the peak of its series of interest rate hikes in March last year. The institute has raised interest rates at the fastest rate in four decades, making loans more expensive for companies and individuals.
The question for investors and analysts is what comes next. Some clues could be provided in the interest rate forecasts that the bank publishes quarterly and in a press conference with the institution’s president, Jerome Powell.
Another rate hike this year likely remains on the table as the Fed forecasts fewer rate cuts next year than it forecast in June. This will underline the bank’s determination to keep interest rates high well into next year to bring inflation back to its two percent target.
The persistence of inflation pressures was highlighted in two government reports released last week, adding some uncertainty to forecasts. Claudia Sahm, a former economist at the bank, said she believes a “soft landing” – in which inflation is tamed without triggering a recession – is still possible. At the same time, however, he warned that inflation could remain higher than the bank’s estimates. Or, he suggested, the cumulative effect of the 11 rate hikes could push the economy into recession.
“We have reached a point where the situation could develop in several directions,” noted Sahm. Federal Reserve officials “will respond as circumstances warrant.”