“In recent months, there has been some further progress toward the Committee’s 2% inflation objective,” the Fed said.
The Federal Reserve (Fed) announced that it maintained This Wednesday, its reference interest rates will remain unchanged but claimed to have achieved “some more progress” in its fight against inflationwhich gave the market signals that cuts are closer.
Fed governors voted unanimously in favor of maintain rates between 5.3% and 5.5%. After a slight rise in inflation at the beginning of the year, The latest data suggest that the Federal Reserve’s mission to return the price index to its long-term target of 2% is now on the right track.
Your favorite measurement of Inflation slowed to an annual rate of 2.5% last monthwhile economic growth remained strong and the labor market has balanced out.
“In recent months there has been some further progress towards the 2% inflation target set by the Committee”the Fed said. The decision represents a slight change in tone from June, when the central bank said “modest additional progress” had been made.
“The Committee views the risks to achieving its employment and inflation objectives as continuing to shift toward better equilibrium,” the Federal Reserve said, adding that it is “aware of the risks on both sides.”
Fed Chairman Jerome Powell is scheduled to address reporters later on Wednesday and analysts expect him to hint at the possibility of an interest rate cut at the Fed’s next meeting in September.
What is the market reading and what can we expect?
“The FED kept the monetary policy rate unchanged within the range 5.25% / 5.50% YTM. The statement highlights that The risks of both mandates (inflation and employment) are more balanced“This implies that today they weigh almost equally in the decision,” said Juan Cruz Lekovic, CFA and Fund Manager of Schroders Argentina.
Source: Ambito
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