NEW YORK (EFE).— The president of the Federal Reserve (Fed), Jerome Powell, reiterated yesterday Friday that they are in no hurry to cut the interest rate this year, during an event in California.
Powell assured that this measure will not be taken until he sees better inflation readings and has more confidence that annual price increases are falling towards his 2% objective, according to Bloomberg.
“We don’t need to be in a hurry to cut,” the central banker said during a conference at the Federal Reserve Bank of San Francisco (California).
However, the central banker highlighted that the new inflation data published earlier (yesterday yesterday) are in line with his expectations.
“It’s nice to see something conform to expectations.” he noted, adding that the latest readings are not as good as what policymakers saw last year.
Powell said inflation is expected to continue falling, although it is sometimes a “bumpy road,” Bloomberg further noted.
The country’s central bank has kept rates unchanged since its July 2023 meeting, ranging from 5.25% to 5.5%, its highest level since 2001.
The Fed president, always careful with his comments, said earlier this month that the body he heads will decide carefully and thoughtfully when to lower interest rates.
On that occasion, the country’s central banker indicated that this decision will be made at some point this year when it is certain that US inflation is being reduced in a sustained manner.
Low price index
The personal consumption expenditure (PCE) price index, a key data that guides the monetary policy of the United States Federal Reserve (Fed), registered an increase of 0.3% between January and February, according to the report published yesterday Friday by the Bureau of Economic Statistics (BEA).
However, compared to the previous 12 months, prices rose 2.5% in February, slightly above the 2.4% rise in January.
According to the report, food prices increased 1.3% and energy prices decreased 2.3%. Excluding food and energy, the PCE price index increased 2.8% over a twelve-month period.
The prices of goods registered an increase of 0.5% and that of services 0.3%.
Within services, those that contributed the most to the increase were financial services and insurance, transportation services, housing and public services.
While in goods, it stands out that the largest contributor to the increase was spending on motor vehicles and spare parts.
PIB alza
On Thursday of this ending week, it was reported that the country grew 3.1% in 2023, according to the latest and definitive review of the Gross Domestic Product (GDP) published by the Bureau of Economic Statistics (BEA).
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 had a technical recession.
The organization also left the fourth quarter figure unchanged and confirmed that the US economy grew only 0.8 compared to 1.2% in the third quarter.
Banxico Rate Adjustment
Given Banxico’s recent rate cut, the Nu firm adjusts its yield into account.
Sector reaction
After the Bank of Mexico reduced its reference rate by 25 basis points last week, the Mexican financial sector is beginning to react in its savings products. Starting next April 16, Nu will adjust the annual return on your account from 15% to 14.75%.
Will adapt factors
“This rate will be maintained until May 23 of the current year, the date on which it will be reviewed and adapted to factors such as the macroeconomic context of Mexico, to remain one of the most competitive in the market,” the firm reported.
#rush #cut #rate
2024-04-05 10:40:18
