WASHINGTON.- This Wednesday, the United States Federal Reserve (Fed) announced that maintains interest rates in its current rank for the fifth consecutive time and considered that it is not appropriate to reduce them until we are sure that inflation is moving sustainably towards the 2% target.
“When considering any adjustment, the Committee will carefully monitor incoming information and the balance of risks,” said the US regulator following maintaining rates in the range of 5.25% to 5.5%, its highest level since 2001, unanimously. .
The members of the Federal Open Market Committee (FOMC, in English), the body in charge of deciding whether or not to raise rates, made this decision at the end of a two-day meeting.
Its conclusion was announced in a statement shortly before the Fed chairman, Jerome Powelltake the floor to explain it and deliver a speech that will be closely analyzed to see if it gives a clearer picture of the central bank’s future decisions.
GDP is one of the data that the regulator closely analyzes, along with inflation.
“Recent indicators suggest that economic activity has been expanding at a solid pace. Employment growth has remained strong and the unemployment rate has remained low. “Inflation has decreased over the past year, but remains high,” said the Fed, which said it was “firmly committed” to inflation reaching 2%.
The Committee noted that it “would be prepared to adjust the monetary policy stance as appropriate if risks arise that might impede the achievement of objectives.”
The median of the Fed governors’ forecasts indicated in another report that, according to the progress made in December, rates will be at 4.6% in 2024 (the equivalent of a range of 4.5% to 4.75%), for cut one point in 2025, to 3.6%, and reach 2.9% in 2026.
These figures reflect that the majority of its members believe that there will be declines over the next year, although it does not necessarily mean that there will be.
The Fed today presented new estimates that the US economy will grow 2.1%, inflation will be at 2.6% and reach 2% in 2026, and unemployment will be around 4% at the end of this year.
Powell believes that rates have reached their peak and in 2024 they might go down
The chairman of the US Federal Reserve (Fed), Jerome Powellconsidered this Wednesday that interest rates reached their peak in this cycle of restrictive monetary policy and that at some point in the year it will be appropriate to begin lowering them if the economy evolves favorably.
Powell spoke following the members of the Federal Open Market Committee (FOMC), the body in charge of deciding whether or not to raise rates, decided for the fifth consecutive time to keep them in the current range of 5.25% to 5.5%, its highest level since 2001.
“We believe that our rate is probably at its peak for this adjustment cycle and that if the economy evolves broadly, as expected, it will probably be appropriate to begin reducing moderation at some point this year,” he said in a statement. Press conference.
The FOMC considered today that at the end of the year interest rates will move in a medium range of three-quarters of a point below the current rate, which would mean that the Fed would carry out three rate cuts throughout 2024.
“My colleagues and I are very aware that high inflation imposes significant difficulties, since it erodes purchasing power,” said Powell, who also recalled that it is important to get the timing right for the first rate cut this year, since that a late decision will affect the improvement of the labor market and full employment.
We are in a situation, he added, in which if the rate policy is relaxed too much or too soon, inflation might rise, and if it is done too late it can cause “unnecessary damage to employment,” which is why the Fed president He insisted that his body wants to “be careful.”
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2024-04-04 22:19:08
