In the text issued by the Fed, he also assured that the unemployment rate is low and? earnings “were robust”. They also emphasized Russia’s war with Ukraineand in this regard, they opined that “is contributing to elevated global uncertainty.”
“Inflation has decreased a bit, but it is still high”the US central bank said in a statement that marked explicit acknowledgment of the progress made in slowing the pace of price increases from 40-year highs reached last year.
The decision to raise the reference rate by 0.25 points on this occasion was a move widely anticipated by investors and commented on by US central bank officials ahead of this week’s two-day policy session.
But by making good on the promise of more rate hikes to come, the Fed rejected investor expectations that it was ready to mark the end of the current tightening cycle as a nod to the fact that inflation was steadily declining for six months.
The statement indicated that any future increase in rates would be in quarter percentage point incrementsremoving a reference to the “pace” of future increases and referring instead to the “extent” of rate changes.
But those, he said, would take into account how policy moves so far had impacted the economy, language that tied more rate hikes to how upcoming economic data evolves.
The Fed expects to be able to keep pushing inflation to its 2% target without triggering a deep recession or causing a substantial increase in the unemployment rate from the current 3.5%, a level rarely seen in recent decades. Inflation slowed to an annual rate of 5% in December.
Source: Ambito
