2024-04-13 16:01:18
The leadership of the Federal Reserve System (FRS) has expressed concern that inflation is not slowing down quickly enough, but still expects the key interest rate to be cut at some point during this year, according to the minutes of the latest meeting of the Federal Open Market Committee (FOMC), Day.Az reports with link to TASS.
Following the meeting held on March 19-20, the Fed left the interest rate on federal funds in the range of 5.25-5.5% per annum, as most analysts expected. It is at its highest level in 23 years.
“Meeting participants generally noted uncertainty about the duration of the period of high inflation and expressed the view that recent data did not increase their confidence that inflation is moving steadily towards the 2% level,” the document said.
Members of the Fed’s leadership noted that geopolitical uncertainty and rising energy prices remain risks that could lead to accelerated inflation. Easing monetary policy could also increase upward pressure on prices.
At the same time, FOMC members pointed to a more balanced labor market, as well as weakness in the Chinese economy and a deteriorating commercial real estate market.
The meeting also discussed higher-than-expected consumer price growth in January and February. Overall, a slight acceleration in inflation was forecast due to seasonal factors, but “several meeting participants noted that the recent rise in inflation has been relatively broad-based and cannot be dismissed as a mere statistical anomaly.”
At the same time, “virtually all participants concluded that a transition to a less restrictive policy policy at some point this year would be justified if the economic situation develops as expected,” the minutes say.
“In support of this opinion, they noted that the disinflationary process is generally in accordance with forecasts, which envisaged that it would be somewhat uneven,” the document states.
The next FOMC meeting is scheduled for April 30 – May 1.
Subscribe to our WhatsApp channel and stay up to date with the main news!