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Wednesday, February 28, 2024

Interest rates in the US. There is a Fed decision

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The Fed left interest rates in the US unchanged at 5.25-5.50 percent – said in a statement after the meeting. The Fed did not include any wording about possible further increases in interest rates in the US in its statement.

Decision about interest rates was in line with market expectations and was adopted unanimously. In the current cycle of tightening monetary policy, the Fed has raised interest rates. by a total of 525 basis points (bps). Interest rates In USA are the highest since 2007, and the pace of their increase is the highest since the early 1980s, when Paul Volcker was the Fed president.

The Fed is keeping interest rates unchanged

“To achieve its objectives, the Committee has decided to maintain the target range for the federal funds rate at 5.25 percent to 5.5 percent. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully evaluate emerging data, the changing outlook and the balance of risks .The Committee does not expect that it will be appropriate to reduce the target range until it has greater certainty that inflation will continue to trend toward 2 percent on a sustained basis. In addition, the Committee will continue to reduce its holdings of Treasury securities and agency debt and agency mortgage-backed securities, in accordance with previously announced plans,” it was written in a statement after the meeting.

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“In assessing the appropriate monetary policy stance, the Committee will continue to monitor the impact of incoming information on the economic outlook. The Committee is prepared to appropriately adjust the monetary policy stance in the event of threats that may hinder the achievement of the Committee’s objectives. In its assessments, the Committee will take into account a wide range of information , including readings on the situation on the labor market, inflation pressure and inflation expectations, as well as the development of the financial and international situation,” it added.

“Uncertain” economic prospects

“The Committee aims to achieve a maximum level of employment and inflation of 2 percent over the long term. The Committee assesses that the risks to achieving the employment and inflation targets are offsetting each other. The economic outlook is uncertain and the Committee continues to pay special attention to attention to the risk of inflation,” it was written in the statement after the meeting.

The next meeting of the Reserve is scheduled for March 19-20. After the meeting, the following will be presented, among others: the latest quarterly macroeconomic projections and a dot-plot chart.

Main photo source: Shutterstock

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