Interest rates in the US. There is a Fed decision. The dollar is strengthening against the zloty

Analysts polled by Bloomberg expected a cut in interest rates. by 25 basis points. The president of the Cleveland Fed, Beth Hammack, voted against the decision and supported no interest rate cuts.

In the current easing cycle, the Fed has lowered its monetary policy interest rates by 100 bps. In the previous cycle of tightening monetary policy, the Fed raised interest rates. by a total of 525 bps.

The effect of the Fed's assessment of the economic situation is the strengthening of the dollar. Around 8:30 p.m. the USD/PLN exchange rate rose to PLN 4.10 from PLN 4.07 before the announcement.

“In order to support its objectives, the Committee has decided to reduce the target range for the federal funds rate by a quarter of a percentage point to the range of 4.25-4.50 percent. In considering the scope and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully evaluate emerging data, the changing outlook and balance the risk balance. (…) The Committee is strongly committed to supporting maximum employment and returning inflation to its 2% target. – was written in a statement after the meeting.

“The committee aims to achieve maximum employment and inflation of 2 percent. in the long run. “The Committee assesses that the risks associated with achieving employment and inflation targets are approximately balanced,” it added. In addition, according to the Fed, the economic outlook is uncertain, and inflation remains elevated.

“The latest data suggests that economic activity continues to expand at a solid pace. Labor market conditions have generally improved since the beginning of the year and the unemployment rate has increased but remains low. Inflation has made progress towards the Committee's 2% target but remains slightly increased,” it was written in a statement after the meeting.

“In assessing the appropriate monetary policy stance, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee remains prepared to adjust the monetary policy stance as necessary if risk factors emerge that could make it more difficult to achieve the Committee's objectives. The Committee's assessments will take into account a wide range of information , including readings on labor market conditions, inflation pressure and inflation expectations, as well as events on financial and international markets,” it added.

The Fed on Wednesday also released new quarterly macroeconomic projections and a dot-plot showing the path of interest rates according to Reserve members.

In December, the FOMC forecasts interest rates. at the level of 4.4 percent at the end of 2024, 3.9 percent at the end of 2025, 3.4 percent at the end of 2026 and 3.1 percent at the end of 2027. In September, the Fed forecast that interest rates In USA will be at the level of 4.4 percent. at the end of 2024, 3.4 percent at the end of 2025 and 2.9 percent at the end of 2026 and 2.9 percent at the end of 2027