2024-05-03 06:38:44
Inflation is still too high. Further progress in reducing it is not guaranteed and the way forward is uncertain.
This was stated by the President of the Federal Reserve Board (FRB) of the USA, Jerome Powell, after the meeting of the central bank of the USA, at which the interest rates remained unchanged for the sixth time in a row – from July 2023 (in the range of 5.25 to 5.5 per hundred – footnote), reported CBS, quoted by BTA.
Powell also said the central bank is watching the labor market, which has so far shown resilience in the face of monetary tightening. “We are ready to respond to an unexpected weakening of the labor market,” said the president of the UFR. He noted the dual task of the central bank, which includes both stable prices and maximum employment.
The US central banker has ruled out a recent rate hike. “I think it’s unlikely that the next move in interest rates will be a hike. I would say it’s unlikely,” Powell said.
His comments come days after it was reported on Friday that the PCE Index (the PCE Index tracked by the US Federal Reserve in connection with making monetary policy decisions – ed.) rose by 0 .2 percentage points to 2.7 percent year-on-year in March.
Today, in addition to deciding to leave interest rates unchanged, the Fed decided to slow the pace of its “quantitative tightening” program, which allows the US central bank to draw maturing bond proceeds off its balance sheet
The program began in June 2022 and saw the UFR balance fall to $7.4 trillion, $1.5 trillion less than its peak in mid-2022.
From June, the UFR will reduce its monthly ceiling for carrying out these operations to $25 billion from $60 billion now. As a result, the annual reduction in UFR assets will be $300 billion, compared to $720 billion when the program began, adds CNBC.