The Federal Open Market Committee (FOMC) of the US Federal Reserve discussed the possibility of lowering interest rates in 2024, but stressed the need to maintain a restrictive stance to control inflation, according to the minutes of its December 12-13 meeting.

FOMC members estimated that the reference rate had probably peaked in the current monetary tightening cycle. However, they cautioned that future adjustments would depend on economic developments.

The issuing institute emphasized the importance of a data-based approach and caution in setting monetary policy. He reiterated that the strategy should remain restrictive until inflation was aligned with the 2 per cent target.

Fed officials considered that the current monetary policy was curbing economic activity and inflation, but also acknowledged that the economy might require a further increase in the target range.

All members of the FOMC agreed that “clear progress” had been made in reducing inflation by 2023, and most saw that inflation risks were balancing out.

However, some members expressed concern about the “uncertainty” of maintaining an overly restrictive policy. Based on the December macroeconomic projections, almost all participants anticipated that interest rates in 2024 would close below the current target range of 5.25% to 5.5%.

K. Tovar

Source: Idealista

(Reference image source: @FJRL65, x)

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