The United States Federal Reserve (Fed) decided to maintain interest rates between 5.25 and 5.5%, their highest level since 2001, after the meeting of its Open Market Committee carried out between yesterday and today.
He FOMC said in a statement that it does not expect to reduce rates “until it has more confidence that the inflation is moving sustainably towards 2%”, so that an eventual cut could come in September, thus affecting investor confidence in the dollar.
The Fed It also decided to continue reducing its “securities holdings” Treasure, agency debt and agency mortgage-backed securities.”
The US central bank stressed that inflation fell during the past year and acknowledged that in recent months there had been “more progress” in this area, but the authorities considered that it remains “somewhat high.” On the other hand, the institution stated that recent indicators suggest that inflation economic activity has continued to expand at a solid pace and, although the increase in employment has moderated, the rate of unemployment remains low.
The Committee thus considers that the risks to achieving its employment and inflation objectives have moved towards a better outlook. balance, although it has warned that the economic outlook is “uncertain” and remains very attentive to the risks of both inflation and employment.
The next meeting of the Open Market Committee to discuss the level of interest rates is scheduled for September 17-18.
Inflation and economy
As for the different data, the economy of USA experienced an annualized growth of 2.8% in its GDP in the second quarter of 2024, compared to 1.4% in the previous quarter.
At the same time, 206,000 jobs were created in the labor market. non-farm jobs last June, despite which unemployment rose by one-tenth of a point to 4.1%. The US has now been creating jobs for 42 consecutive months.
Meanwhile, the price index of personal consumption expenditure, The Fed’s preferred metric for monitoring inflation, came in at 2.5% in June, down 0.1% from the previous month. The monthly rate edged up to 0.1% from the previous plateau. The underlying variable closed at 2.6% year-on-year, unchanged.
Source: Ambito
