2023-11-01 20:03:29
The US Federal Reserve does not touch the key interest rate. It decided on Wednesday to leave the key monetary policy rate unchanged in the range of 5.25 to 5.50 percent. This meant that the monetary authorities once again kept their feet still after they had already paused in September. This is the highest interest rate level since 2001 and therefore for 22 years.
Before the interest rate decision was announced, investors in Germany had anticipated that the Federal Reserve would leave key interest rates unchanged. The German stock index posted gains until the close of trading on Wednesday and rose by 0.8 percent to a good 14,923 points. The European Euro Stoxx 50 index gained 0.7 percent to around 4,090 points. Almost 100 percent of market participants previously expected a break in interest rates. The greatest tension is therefore over how Fed President Jerome Powell will comment on a possible interest rate increase in December, said market analyst Konstantin Oldenburger from CMC Markets. But here too, very few people on the market expected another interest rate hike.
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In the fight against the sharp rise in consumer prices, the central bank has raised the key interest rate eleven times since March 2022. After ten increases in a row, there was an initial pause in interest rates last June, then an increased increase in July and an unchanged key interest rate again in September.
Inflation in the USA reached a 40-year high of 9.1 percent in June 2022 due to the effects of the corona pandemic and the Russian war of aggression against Ukraine. As a result, the inflation rate fell significantly and was most recently at 3.7 percent for two months in a row. The Fed is pursuing the long-term goal of an inflation rate of two percent, but does not want to strangle the economy by raising key interest rates too much.
In Europe, the question of when the ECB will lower interest rates is currently being discussed. The inflation rate in the euro area recently fell to 2.9 percent.
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