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The Federal Reserve unveiled Thursday the minutes of the Federal Open Market Committee meeting from June 12 to 13, during which members approved a 25 basis point increase in the rates of 39, interest for the second time this year. Between 1.75% and 2.00%, which was then expected by badysts, with the reference to go ahead in the tightening of monetary policy and the expansion of budget normalization plans .
Members noted in the minutes of the meeting that the Commission's guidelines and decisions based on data available to FOMC members since the meeting of May 1 and 2 at a sustained pace, the gains jobs have stagnated, on average, over the last few months, and unemployment rates have dropped.
Members pointed out that recent data reflected the rise in household spending, while fixed investment activity continued to grow strongly and inflationary pressures measured over 12 months, at the end of the year. exclusion of food and energy. And that the inflation surveys had changed slightly in the long run, in general.
Members also pointed out that the Commission was seeking to improve employment opportunities for their maximum levels and price stability, and that the Committee expected that the gradual increase in the target range of the indication that the working conditions are strong and that inflation is close to the 2% target of the medium-term committee, and that the risks to the economic outlook seem almost balanced.
At 19:11 GMT, the dollar index is depreciated against the seven major currencies, the euro weighing nearly half of the index plus the Chinese yuan, the Swiss franc , the Japanese yen, the pound sterling, the Swedish krona and the Canadian dollar. The pound was trading at 94.48, compared to opening at 94.53, after reaching its lowest level since June 26 at 94.18 and the highest at 94.59.
In the same vein, the minutes indicated that, according to the conditions of the labor market, inflation rates and current expectations, the Commission's decisions unanimously lowered the target rate from 1 to 2 %, Which promotes good labor market conditions and a steady return of inflation to 2%, as well as a reduction in mortgage-backed securities of more than $ 18 and $ 12 billion in June and $ 24 and $ 16 billion in the month of July. This month
Given the timing and rate of change of short-term interest rates, FOMC members indicated in the minutes of the meeting that the Commission was badessing the current economic and financial conditions. expected from full employment and inflation, including an expanded set of economic data and information such as labor market indicators, inflationary pressure indicators and expectations for the future. inflation, as well as readings on international financial developments. Here are the Federal Reserve's forecasts for growth, unemployment and inflation as well as future benchmark interest rates for the next three years, as revealed by the Federal Reserve after the FOMC's meeting of the June 12 to 13, last June.
The growth rate for the year 2018 should be between 2.7% and 3.0%, compared to 2.6% and 3.0% in the projections before the meeting of March 20th and 21st, and projections for 2019 The growth rate for the year 2020 was between 1.8% and 2.0%, compared to 1.8% and 2.1%, forecasting the long-term growth rate With a change between 1.8% and 2.0%.
Unemployment rates for 2018 could be between 3.6% and 3.7%, compared with 3.6% and 3.8% in projections prior to the March 20th and 21st meeting. Between 3.4% and 3.5% against 3.4% and 3.7%, while the expectations for 2020 are between 3.4% and 3.7% against 3.5% and 3.8%, reaching expectations for long-term unemployment rates ranging from 4.3% and 4.6% vs. 4.3% and 4.7%.
Inflation rates for 2018 could be between 2.0% and 2.1%, compared to 1.8% and 2.0% in projections before the March 20-21 meeting, while forecasts for 2019 have changed little Between 2.0% and 2.2%, expectations for 2020 have changed little between 2.1% and 2.2%, meeting long-term inflation expectations that have also stabilized at 2.0%, unchanged from the expectations of March 20-21.
Underlying inflation rates for 2018 could range between 1.9% and 2.0%, compared with 1.8% and 2.0% before March 20-21, while forecasts for 2019 are unchanged Between 2.0% and 2.2%, reaching the forecasts of core inflation rates for 2020, which was also little changed compared to the meeting of March 20th and 21st between 2.1% and 2.2%.
In conclusion, the Federal Open Market Committee's forecast for future short-term benchmark interest rates for the year 2018 is between 2.1% and 2.4%, unchanged by compared to the forecasts prior to March 20-21. Between 2.9% and 3.4% against 2.8% and 3.4%, while the forecasts for 2020 have changed little between 3.1% and 3.6%, reaching the expectations of the future of short-term benchmark long-term benchmark interest rate ranging between 2.8% and 3.0%, unchanged from previous forecasts of March 20th and 21st.
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