Sunday, October 1, 2023

In the United States the Fed begins its meeting rates are expected to remain stable

In the United States the Fed begins its meeting rates are expected to remain stable The Federal Reserve (Fed), the US central bank, began its two-day meeting on Tuesday, during which it could decide to keep rates in their current range, without guaranteeing that the recovery cycle has arrived . until the end.

The meeting of the Monetary Policy Committee (FOMC) “began at 10:30 a.m. (2:30 p.m. GMT) as scheduled,” a Fed spokesperson told AFP. It will end at noon on Wednesday. The decision will be announced on Wednesday at 2:00 p.m. (6:00 p.m. GMT) in a press release. Updated economic forecasts will also be published in terms of GDP growth, inflation, employment and rate changes.

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The president of the institution, Jerome Powell, will hold a press conference half an hour later. Almost all market players expect the main interest rate to remain in the range of 5.25 to 5.50%, where it has been since the previous meeting at the end of July.

Rates have been raised 11 times since March 2022, a very rapid pace, with the aim of curbing inflation, which is at its highest level in more than 40 years. This has since slowed significantly, despite a further acceleration this summer. In August it stood at 3.7% year-on-year, according to the IPC index.

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The Federal Reserve favors the PCE index, which wants to return it to around 2%, and which in July was 3.3% year-on-year. August data will be published on September 29. The situation also appears to be gradually rebalancing in the labor market, after two years of labor shortages, which caused wages to skyrocket. The unemployment rate rose to 3.8% in August, due to an influx of new workers, which should help calm inflation.

As for consumption, the engine of US economic growth, it has been vigorous since the beginning of the Covid crisis, fueling high inflation, but it seems to be showing the first signs of weakness. The Federal Reserve will meet in full for the first time since February, following the departure of former Vice President Lael Brainard, who left office to lead the White House team of economic advisers.

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She will be succeeded by a Fed governor, Philip Jefferson, as recently confirmed by the Senate, which also validated the nomination of Adriana Kugler, the United States representative to the World Bank, for the vacant position of governor, becoming the first female Fed official. of Hispanic origin. .

Times of National
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