Awani Review

Complete News World

USA |  According to the central bank, even if the economy slows ‘significantly’, rates should remain high

USA | According to the central bank, even if the economy slows ‘significantly’, rates should remain high

(Washington) “Higher, longer” is the epitome of the idea retained by the US Central Bank (Fed), which expects rates to remain high for a while, despite expecting a clear slowdown in the US economy last quarter. .

“All” central bank officials judged it “appropriate to maintain an accommodative (monetary) policy for a limited period of time” to ensure inflation stays close to its target of 2%. , according to the report, or β€œminutes” ,” of the last meeting of the Central Bank, October 31 and 1R Posted on Tuesday, Nov.

The central bank’s monetary policy committee kept rates at 5.25% to 5.50% for the second consecutive session during this meeting, a position expected to continue at its year-end meeting on December 12 and 13, according to the survey. Carried out by CMEGroup.

After 11 increases since March 2022, a total of more than 5 percentage point increases, rates have now peaked, even if Fed Chairman Jerome Powell doesn’t close the door. to increase further.

However, the Federal Reserve’s Monetary Policy Committee (FOMC) appears to be less committed than at the end of its previous meeting, “ready to adjust the direction of monetary policy if questionable risks emerge” reaching 2%. objective.

The FOMC is repeating what most of its members have already explained: the next decisions will be made according to the evolution of macroeconomic indicators.

In this case, Fed economists expect a clear slowdown in the US economy in the last quarter, after the third quarter, on the contrary, accelerated growth.

They expect “slower-than-potential growth over the next couple of years” before returning to near-term pace in 2026, due to the slack in monetary policy.

See also  Q3 goal for McLaren in Australia

Inflation eased to 3.2% year-on-year in October from 3.7% in September, according to the CPI index released on Tuesday. Another measure supported by the central bank is the PCE index, which will be released on November 30.