2023-08-27 19:04:00
The leaders of the US Federal Reserve and the European Central Bank have shown determination in the fight once morest high consumer prices and have announced that monetary policy will remain tight. “We must and we will keep inflation at two percent in the medium term,” said ECB boss Christine Lagarde, according to the speech at the central bank conference in Jackson Hole in the USA.
This means that the ECB must keep interest rates at a sufficiently high level for as long as it is “necessary”. The fight once morest inflation is not yet won.
Fed Chairman Jerome Powell is also pursuing a strict monetary policy and has left the door open for further interest rate hikes: “The US Federal Reserve is ready to raise interest rates further if necessary.” Borrowing costs will be kept high until inflation is on a sustainable path towards the inflation target. At its most recent meeting in late July, the US Federal Reserve raised interest rates by 0.25 percentage points to a range of 5.25 to 5.5 percent. The key interest rate of the ECB is 4.25 percent.
However, Powell did not rule out the possibility of the Fed keeping interest rates stable at its next meeting. “Given the progress we’ve made, we’re in a position to proceed cautiously in the coming sessions,” Powell said. The incoming data will be evaluated.
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