As expected, Federal Reserve I decided this Wednesday protect your interest rates officers at the fork between 5.25% and 5.5% He raised it at the end of July. Therefore, the price of money in the USA will remain at the same level. Highest level since January 2001However, the dollar will not rise further after the central bank’s decision. increased elevenfold an increase of 5.25 percentage points March 2022 To fight inflation. FED left yes open the door to upgrade more rates to be applied in the future, if deemed necessary, and majority of advisors leaning in for today one last rise before the year is over.
“We I’m ready to climb more We intend to keep interest rates and monetary policy at a certain level, if appropriate. restrictive level Until we are confident that inflation is falling steadily towards our target. 2% target. In determining the scope additional hardening In determining the policy that would be appropriate to return inflation to 2% over time, the committee accumulated erection monetary policy, delays With what monetary policy? effects economic activity and inflation and results economic and financial developments,” said chairman Jerome Powell.
So the senior official explained: seven councilors The Fed currently prefers go up more types, meanwhile 12 more people they think it will be necessary an additional increase at one of the two meetings they will hold before the end of the year, November and in the middle December. The midpoint of Fed advisors’ differing estimates of where interest rates will be types are suitable It remained at this level at the end of the year 5.6%, above what is available. It also showed an increase for next year (from 4.6% to 5.1%) and the year after (from 3.4% to 3.9%), which shows that they are expecting this. Rates stay higher for longer and delays first downs these.
So Powell wanted to make clear that his decision to pause rate hikes this Wednesday does not mean that he thinks the Fed has reached or has not reached the level of restrictive monetary policy he deems necessary. But he also reiterated that the increases over the past year and a half have allowed him to reach “a situation where we can do it.” be careful“. The organization had already paused interest rate increases in June. estimate results hardening Following the interest rate increase in July, monetary policy was changed. Some analysts They have speculated that the surge cycle may already be over, but others think an eventual surge is likely.
Macroeconomic forecasts
The Federal Reserve based its decision this Wednesday on its new macroeconomic forecast scenario. Take a guess now annual inflation In the United States, it will be 3.3% this year, 2.5% next year and 2.2% in 2025, while the 2% target, which he predicted for the first time, will be reached in 2026. The new forecast represents a slight upward revision compared to June (3.2%, 2.5% and 2.1%). Regarding your prediction regarding CPI underlying (excluding the most volatile energy and food prices) now predicting 3.7%, 2.6% and 2.3%, and also 2% in 2026, down from the previous 3.9%, 2.6% and 2.2% will reach its goal.
Similarly, it also revised its forecasts significantly upwards. economic growth It kept the same forecast at 1.8% for 2025 as it did for this year (from 1% to 2.1%) and next year (from 1.1% to 1.5%) and for 2026. unemploymentThe central bank now foresees a better development than it expected in March. Therefore, it predicts that the unemployment rate will be 3.8%, 4.1%, 4.1% and 4% over the four-year period within the forecast horizon; compared to 4.1%, 4.5% and 4.5% above.
HE general CPI It has moderated significantly from the maximum 9.1 percent the U.S. reached in mid-2022. Of course, in August it increased from 3.2 percent in July to more than expected. 3.7%although index underlying -excluding the most volatile energy and food prices- decreased from 4.7% to 4.7% 4.3%. Therefore the Fed’s policy appears to be bearing fruit and economy He gets angry as much as he is afraid. GDP increased by 0.5% in the first quarter and 0.6% in the second quarter. unemployment rate It rose from 3.5% to 3.8% last month and is moving away from the lowest levels in the last 50 years.