2023-12-01 19:14:29
US Federal Reserve Chairman Jerome Powell signaled another pause before the last interest rate meeting of the year and rejected speculation about future interest rate cuts. Given the progress made so quickly in the fight against inflation, the central bank can now move forward “cautiously,” the Fed chief said on Friday in Atlanta. But the time has not yet come to declare victory over inflation. “It would be premature to conclude with confidence that we have reached a sufficiently hawkish stance, or to speculate about when monetary policy might be eased,” he added.
Fed Director Christopher Waller recently initiated a discussion about a possible interest rate cut next year. The monetary watchdog emphasized that there are good economic arguments for easing monetary policy if inflation continues to decline for another few months. But he didn’t want to commit to a time period.
Powell now reiterated that the central bank is ready to further tighten monetary policy if this appears appropriate. The Federal Open Market Committee, which is responsible for interest rate policy, has not touched interest rates at two meetings in a row. The monetary authorities kept the key monetary policy rate in the range of 5.25 to 5.50 percent in November and left open the possibility of a future increase.
However, it is expected on the futures markets that this will no longer happen and that the key interest rate will not be affected in the middle of the month. The fact that price inflation in the USA has eased speaks in favor of a wait-and-see approach. The inflation rate fell to 3.2 percent in October, after 3.7 percent in September.
Christian Siedenbiedel Published/Updated: Recommendations: 8 Archibald Preuschat Published/Updated: , Recommendations: 13 Archibald Preuschat Published/Updated: Recommendations: 2
The central bank is aiming for a value of two percent, which is considered ideal for economic development. One measure of inflation that monetary authorities keep a close eye on is consumers’ personal spending. The volatile food and energy costs are excluded. This so-called PCE core index fell to an annual inflation rate of 3.5 percent in October, after 3.7 percent in September.
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