Monetary policy|The key interest rate has been in the range of 5.25–5.50 percent since September.
of the United States the central bank decided on wednesday to keep its key interest rate unchanged because the increase in consumer prices, i.e. inflation, has not slowed down enough.
The decision of the Open Market Committee, which decides on monetary policy, was unanimous. The committee announces that it is still waiting for more evidence of a slowdown in inflation to two percent.
“Inflation has slowed down over the past year, but it is fast. In recent months, moderate progress has been made towards the two percent inflation target set by the committee,” states the open market committee.
Based on the estimates of the committee members, it seems that the central bank will lower its key interest rate once this year by 0.25 percent.
“If nothing unforeseen happens, I believe the central bank will lower the key interest rate for the first time in December,” says the chief analyst of the financial company Nordea Jan von Gerich.
Decision means that the policy rate will remain in the range of 5.25-5.50 percent. The last time monetary policy was as tight was in 2001.
In order to tame rapid inflation, the central bank has tightened monetary policy 11 times in just over two years. According to its price stability objective, inflation must be two percent on average over a long period of time.
In May, inflation slowed down to 3.3 percentbut is still relatively far from the central bank’s goal.
Thursday based on the published economic forecast, the US economy will grow by 2.1 percent this year, 2.0 percent next year and by the same amount in 2026.
Inflation is forecast to slow to 2.6% this year, 2.3% next year and 2.0% in 2026.
The news is updated.
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