[ad_1]
The Federal Reserve kept its key rate unchanged as expected during a two-day meeting that ended Thursday, indicating that it will continue to raise rates gradually if growth continues. economic remains on track.
In its policy statement, the Fed recognized the strength of consumer spending, which propelled the economy towards the strongest consecutive quarters of growth recorded four years ago in the second and third quarters. The Fed, however, added that business investment had recently slowed from the strong pace recorded early in the year.
Traders are confident that the Federal Open Market Committee, charged with defining policies, will raise interest rates in December, a decision that will almost immediately increase borrowing costs for Americans with credit cards and other short-term loans. The market predicted a 78% probability that the FOMC would raise the federal funds benchmark rate to a range of 2.25% to 2.5% at its December meeting, according to data compiled by Bloomberg.
"The increased volatility of financial markets did not alter the Fed's determination to raise rates in December," said Ellen Zentner, chief economist at Morgan Stanley.
The Fed also seems to remain steadfast in the face of criticism from President Donald Trump, who said the central bank was "crazy" at tightening financial conditions.
Thursday's statement marked the final announcement of Fed policy, at least in the near future, which was not followed by a press conference. Fed Chairman Jerome Powell announced in June that from January 2019, he would give press conferences after each meeting to improve communication.
Since Ben Bernanke started the practice in April 2011, press conferences have been held once a quarter, or four times at the eight Fed meetings held each year.
"The information received since the meeting of the Federal Open Market Committee in September indicates that the labor market has continued to strengthen and that economic activity has increased at a steady pace. Employment has been strong on average in recent months and household spending has continued to grow strongly, while business fixed investment growth has slowed relative to its rapid pace recorded early in the year Over 12 months, overall inflation and inflation of products other than food and energy Long-term inflation indicators are little changed, overall.
In accordance in its statutory mandate, the Committee strives to promote maximum employment and price stability, and hopes that further gradual increases in the target range of federal funds will correspond to an expansion economic activity, the strength of the labor market and inflation close to the 2% symmetric target in the medium term. The risks to the economic outlook seem roughly balanced.
In view of the current and projected labor market and inflation situation, the Committee decides to maintain the target range of the federal funds rate at a rate of between 2 and 2-1 / 4 per cent.
To determine the timing and magnitude of future adjustments to the federal funds rate target range, the Committee will badess the economic conditions achieved and expected in relation to its maximum employment objective and its objective. symmetrical inflation of 2%. This badessment will take into account a wide range of information, including measures of the labor market situation, indicators of inflationary pressures and inflation expectations, as well as readings on financial developments. and international.
Those who voted for the FOMC's monetary policy action were: Jerome H. Powell, President; John C. Williams, Vice President; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Richard H. Clarida; Mary C. Daly; Loretta J. Mester; and Randal K. Quarles. "
Now read on:
Source link
