The central bank of the United States, the Federal Reserve (Fed by its abbreviation in English) opted to keep interest rates unchanged, in the range of 5.25 – 5.50 percent in which it has remained since July, but did not rule out the possibility of an increase in borrowing costs in the future. The policy statement released by the agency acknowledged the strength of the U.S. economy, but also referenced the tighter financial conditions facing businesses and households.
According to the policy statement, “Economic activity expanded at a solid pace in the third quarter“. This statement marked an improvement from the “solid pace” the Fed had seen at its September meeting, and is based on recent data indicating that the US gross domestic product (GDP) grew at an annual rate of 4.9 percent in the third quarter.
Although markets believe the Fed may be done with rate hikes as financial conditions have adjusted themselves through higher market-based interest rates, Data pointing to a stronger-than-expected economy and labor market keeps another rate hike likely.
(Also we recommend: Does Ron DeSantis wear heels to look taller? This answered)
Fed sets goal of returning to 2 percent rates in the United States
The Fed’s latest statement notes that as job gains remain “strong” and inflation remains “elevated,” the central bank continues to view “the degree of additional policy tightening that may be appropriate to return inflation to 2 percent over time“.
The statement mentioned that the Fed is still watching the developing impact of its latest rate hikes as it considers further action, being mindful of “the lags with which monetary policy affects economic activity and inflation, as well as the economic and financial developments”. The institution has made rate increases of 5.25 percentage points since March 2022.
Rising market interest rates could impact economic growth. The statement mentioned this possible impact and referred to tighter financial conditions as a factor that could affect economic activity, although the effects are unclear.
#Federal #Reserve #happened #todays #meeting #interest #rates