The US Federal Reserve has kept interest rates unchanged, pending signs that inflationary pressures are receding, according to reports.
This decision sets the target range for the Fed’s interest rate at 5.25%-5.5%, the highest level in nearly a quarter of a century. Parliamentarians appear to oppose the idea of increasing borrowing costs to combat inflation; yet, they anticipate that the rate will be cut by the end of the year.
However, in the face of 2022’s soaring prices, which earlier prompted the Fed’s provocation of interest rate hikes, prudence defines its response.
Jerome Powell, the Fed chair, stressed that they would proceed carefully, noting during a press conference held directly after the meeting that they could manage the economy and that the labor market was adequate.
Nonetheless, as amazing as it may appear, the US economy has managed to keep some flexibility in the midst of an upswing and has surpassed expectations.
Adopted predictions for 2024 indicate 2.1%, up from 1.4% just three months ago. In comparison, policymakers forecast year-end inflation to decline to 2.4%, approaching the Fed’s 2% target point.
In the same line, Powell emphasized a well-measured response to fresh data indicating the likelihood of stagnation, which implies a balanced approach when deriving trends.
