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Data for the market: the Fed rules out a new rate hike

Data for the market: the Fed rules out a new rate hike

After three months of stronger-than-anticipated price pressures, which raised fears of stalled gains, the Federal Reserve appears close to achieving its goal.

Since last July, the Federal Reserve has maintained its reference interest rate between 5.25% and 5.50%.

The governor of the Federal Reserve, Christopher Waller dispelled speculation on Tuesday on the need to raise interest rates againindicating that the recent inflation data is “ reassuring” and that the current US central bank interest rate is appropriately set.

After three months of stronger-than-anticipated price pressures, which raised fears of stalled gains, “the latest data on the economy suggests that tight monetary policy is helping to cool aggregate demand, and data from April inflation indicates that progress towards 2% has probably resumed“Waller said in a speech prepared for the Peterson Institute for International Economics.

Central bankers should never say never, but the data suggests that inflation is not accelerating, and I think further increases in the official interest rate are probably not necessary“he added.

Wall Street: how the New York square will react

If he New York Stock Exchange (NYSE) had already been excited about a possible rate cut in the near future, Waller’s words could further drive Wall Street indices that are at all-time highs and breaking new records all during the last few sessions.

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Reuters

In recent months, Federal Reserve policymakers have taken a cautious stance on the outlook for inflation and monetary policy.. Waller, like many of his colleagues, did not reiterate his recent view that a rate cut is likely later this year.

“The economy now appears to be evolving more in line with the committee’s expectations,” Waller said, referring to the Federal Open Market Committee, which oversees the central bank’s monetary policy. “However, absent a significant weakening of the labor market, I need to see several more months of good inflation data before I feel comfortable supporting an easing of monetary policy.”

Since last July, the Federal Reserve has maintained its reference interest rate between 5.25% and 5.50%.

Source: Ambito

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