The United States Federal Reserve (Fed) decided to keep the interest rate in the range of 5.25% to 5.5% for the fifth consecutive time, considering that it is not appropriate to reduce them until we are sure that the inflation sustainably declines towards the 2% target.
“When considering any adjustments, the Committee will carefully monitor incoming information and the balance of risks,” said the Fed after setting the rate at its highest level since 2001, although still projecting three cuts during 2024. Specifically, 9 of the 19 monetary policy makers foresee this scenario and another 9 project two or less, while 1 foresees more cuts than the average.
“In considering any adjustment to the target range of the federal funds rate, the Committee will carefully evaluate emerging data, evolving prospects, and the risk balance”, said the US central bank, which described the macroeconomic picture as “uncertain.”
He Federal Open Market Committee (FOMC) He noted that he “does not expect it to be appropriate to reduce the target range until he has gained greater confidence that inflation is steadily returning towards 2%.”
Economy data
It is worth highlighting that the economy of the world’s leading power experienced an annualized growth of 3.2% of its GDP in the fourth quarter of 2023 compared to 4.9% in the previous quarter, according to the Economic Analysis Office (BEA).
As for the labor market, 275,000 were created non-farm jobs during February, despite which unemployment increased by two tenths, up to 3.9%, according to the Bureau of Labor Statistics of the Department of Labor.
Thus, although the unemployment rate It moved away from the minimum of 3.4% recorded in January and April 2023, its lowest rate since 1969, USA chain 38 consecutive months creating jobs.
At the same time, the personal consumption expenditure price index, the variable preferred by the Fed to monitor inflation, it stood at 2.4% in January, two tenths less than the previous month. The monthly rate recorded a rebound of 0.3% from the previous reading of 0.1%. The underlying variable closed at 2.8% year-on-year, one tenth less.
Source: Ambito
