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Tuesday, May 28, 2024

US interest rates. There is a Fed decision

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The Fed left US interest rates unchanged. The decision is in line with analysts’ expectations.

Experts had previously predicted that there would be a break in the current cycle of aggressive monetary policy tightening.

Also, several Fed policy makers had previously signaled their will to resign interest rate increases at the June Federal Reserve meeting, while leaving the door open to possible further tightening of monetary policy, should the need arise.

“Assuming the Fed takes a pause, it’s possible that the FOMC communiqué may contain wording intended to eliminate expectations that a pause could mean the possibility of a cut,” Richard Flynn, Charles Schwab’s managing director for UK affairs, said ahead of the meeting.

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“Having signaled the possibility of a pause, I believe the Fed is unlikely to veer off course at this particular point in time. They seem to be taking this with some caution given the heightened level of uncertainty. Yesterday’s data inflation Consumer prices were broadly in line with expectations, so there’s nothing to challenge those predictions,” said Richard McGuire, Rabobank’s head of interest rate strategy.

US inflation

Consumer prices in USA increased by 4% in May. year-on-year and month-on-month increased by 0.1 percent. +4.1% expected y/y and +0.1 percent mdm. Core inflation increased by 0.4%. m/m and 5.3 percent. y/y +0.4% expected m/m and +5.2 percent y/y

US prices rose in May at the slowest pace since March 2021.

Main photo source: JIM LO SCALZO/EPA/PAP



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