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Federal Reserve keeps interest rates unchanged in the United States

Federal Reserve keeps interest rates unchanged in the United States

The Federal Reserve The United States Federal Reserve (Fed) announced this Wednesday that it is maintaining interest rates in their current range and stated that it does not expect it to be appropriate to reduce the target range until it is certain that inflation is moving sustainably towards 2%.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook“, noted the US regulator after maintaining rates in the range of 5.25% and 5.5%, their highest level since 2001.

The decision, which was unanimous, was announced in a statement and in a few minutes the president of the Fed, Jerome Powell, will speak to explain it and deliver a speech that will be closely analyzed to see if it gives a clearer picture of the decisions. future of the central bank.

In the statement, the regulator warned, as it usually does after each meeting, that it is “prepared to adjust the monetary policy stance as appropriate if risks arise that could prevent the achievement of objectives” to return inflation to 2%.

The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.“, notes the statement.

According to the Fed, recent economic indicators suggest “that economic activity has been expanding at a solid pace”, that employment growth has moderated, but remains strong and that inflation “has decreased over the past year, but remains high”.

The Committee seeks to achieve maximum employment and inflation at a rate of 2% in the long term. The Committee believes that the risks to achieving its employment and inflation objectives are becoming better balanced. The economic outlook is uncertain and the Committee remains very attentive to inflation risks“, notes the statement.

The members of the Federal Open Market Committee (FOMC), the body in charge of deciding whether or not to raise rates, made this decision after concluding a two-day meeting.

The Fed’s decision comes a few days after the United States announced that it closed 2023 with Gross Domestic Product (GDP) growth of 3.1%, thanks to increased consumer spending despite inflation.

The figure is higher than estimated by economists and higher than the 2.1% of the growth recorded in 2022, the year in which the world’s first economy suffered a technical recession.

GDP is one of the data that the regulator closely analyzes, along with inflation, which in December abandoned its downward streak. Prices rose three tenths year-on-year and inflation closed the year at 3.4%.

This indicator had been falling in year-on-year terms since October and the rise represented a setback for the Fed’s objectives of returning it to 2%.

The US labor market is another of the data analyzed by the Fed and, far from cooling, it remains solid.

In December, the net creation of new jobs rose again and 216,000 positions were created, 43,000 more than those generated a month earlier, and the unemployment rate remained at 3.7%, a figure that does not seem to indicate that the market labor has suffered due to rate increases.

Source: Gestion

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