The US will maintain interest rates

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 % to 5.25 % in anticipation of the effects that have not yet materialized from the ten rate hikes already undertaken.

“Given how far we have come in terms of monetary tightening, the uncertain delays of these policies on the economy, and the potential repercussions of this tightening, we have decided today to leave interest rates unchanged,” Powell explained.

Powell affirmed that the uncertainty that weighs on “economic activity, hiring and inflation” justifies that the rate increases have been moderated “as we approached our destination [of bringing inflation to 2%]”. In fact, the rector of US monetary policy said that pausing the increases “is only a continuation of this process”, since the risks of “overreaching and falling short are approaching”.

Thus, the Fed will have a quarter in total to monitor the evolution of all economic variables, instead of “a period of six weeks”, ahead of the appointment on July 26, where the heads of the central bank will meet again to update the types.

However, despite Powell’s acknowledgment that monetary tightening is faster today than when “the news was [only] in the newspapers”, inflation “remains high and the process of bringing it down to 2 % still has a long way to go.” long haul.” “We have to bring inflation to 2 % and that is what we will do“.

K. Tovar

Source: The Hill

(Reference image source: Unsplash+)

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