Suddenly “uncertainty peak“As one analyst described it, Federal Reserve from the united states It keeps your options open. As expected, the Federal Open Market Committee of the US central bank decided to leave interest rates unchanged this Wednesday. These They stay between 5.25 and 5.50, It is the highest level in the last 22 years, which they reached in July, after an increase of 11 since March last year.
Fed continues as predicted give yourself room to maneuverAnswer field stating that it was done under the chairmanship of the institution’s brand Jerome Powell While fighting inflation and searching for celebritiessoft landing This allows us to get closer to the 2% inflation target and prevent a recession while slowing economic growth.
Third break in a row
already this third meeting in a row Where the Fed flipped the switch StopA year after the most intense rate hikes in 40 years to combat a price rise not seen in 40 years. Despite It is assumed that interest rate cuts will start in 2024question when and how much. The Fed continues on its way without closing its doors; It covers its back in case an unexpected development forces it to continue increasing interest rates and provides the opportunity to observe the impact of high credit costs on the economy.
The latter is not the most expected scenario in every situation. Inflation has slowed and the labor market, although still strong, has cooled somewhat. But there is a point to pay attention to Do not claim victory prematurely.
Predictions
This Wednesday’s meeting, the last of the year, is also quarterly economic forecasts, This allows us to see where the Fed expects to see interest rates at the end of next year and also into 2025, in addition to its outlook for inflation, unemployment, and economic growth.
As always, all eyes are on them Powell’s press conference always offers half an hour after every meeting. There, it’s safe to assume he’ll reiterate his usual message that although progress has been made, “there’s still a way to go” and there’s work to be done. Or, as he did in his speech on December 1, he emphasizes: It is too early to predict when they might start easing monetary policy.