Powell does not rule out an interest increase at the end of the year

The President of the United States Federal Reserve (Fed), Jerome Powell, reported that the institution he leads decided to maintain interest rates in the current range of 5.25 % to 5.5 %, but that a new rise before the end of the year.

“Most members believe it is more likely that it will be appropriate to raise rates again at either of the two remaining meetings this year than not,” Powell said, however.

The president of the American issuing institute also maintained that “the full effect of the tightening has yet to manifest itself.” To this end, Powell recalled that at the beginning of the inflationary crisis it was “important” to act and raise rates quickly, but that, once one is “very close” to the terminal rate, it is necessary to act with caution and “common sense.” ” so as not to “fall short” or “exceed”, hence the agreed pause.

The American assured that future decisions will continue to be based on “the data received, the evolution of forecasts and the risks.”

In fact, Powell does not exclude the possibility that the neutral interest rate has increased with respect to the historical average, which would explain why the economy “has proven more resilient than expected” so far.

K. Tovar

Source: CNBC

(Referential image source: FED, dpa)

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