The US Federal Reserve (Fed) announced this Wednesday a pause in interest rate increasesafter the eleven consecutive increases it has made since March of last year, although He did not clarify if there will be more increases before the end of the year.
“The Committee would be willing to adjust the stance of monetary policy as appropriate if risks arise that may impede the achievement of its objectives,” said the US central bank, which decided to keep rates at the current range of 5.25% and 5.5%, their highest level since 2001.
It is not clear, therefore, If the Fed will make any more increases in the two meetings it has before the end of the year, at the end of October and in December.
The Fed said in its statement that the Federal Open Market Committee (FOMC) will continue to evaluate additional information and its implications for monetary policy.
In that evaluation, he added, A wide range of information will be taken into account, from labor market conditions, inflationary pressures, expectations in this regard and financial and international events that may have an impact.
“We maintain the rate and wait for more data. We really want to see convincing evidence that we have reached the appropriate level” of increases, Fed Chairman Jerome Powell said at a press conference.
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According to their conclusions, The US banking system is “solid and resilient” and Tighter credit conditions for households and businesses are likely to affect economic activity, hiring and inflation.
“The extent of these effects remains uncertain. The Committee remains very attentive to inflation risks,” noted that note, which underlined the desire to place inflation at the 2% target.
In all their meetings since the streak of increases began, the members of the FOMC, the body in charge of deciding whether or not to raise rates, have decided to raise them, except last June, when they decided to take a pause. In July, however, they increased them again.
This pause occurs in a complex context for inflation. After a streak of more than a year of declines from the peak of 9.1% reached in June 2022, prices registered a rise of five tenths in August, to 3.7%, the second consecutive increase.
However, the annual rate of core inflationwhich measures the rise in prices without taking into account energy or food – and is one of the indicators that the Fed focuses on most when making its decisions – It fell four tenths in August and confirmed its downward trend.
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Regarding unemployment, another of the key data that the Fed analyzes to decide possible increases, job creation in recent months has slowed down and in August only 187,000 net jobs were created (a figure below the average of the last twelve months, 271,000).
Although the rate rose three tenths, to 3.8%, the figure still remains robust, in a context of poor growth in the US economy, which in the second quarter grew 0.5% compared to the previous quarter, according to the latest official data.
EFE
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