Business & Economy

Fed minutes confirm another rate hike likely this year

Washington, October 11 (EFE).- The majority of the Federal Open Market Committee of the United States Federal Reserve (Fed) estimated in its last meeting that another increase in interest rates may be necessary before the end of the year.

The US central bank published on Wednesday the minutes of its September 19-20 meeting, which stated that “a majority of participants judged that another increase in the target federal funds rate at a future meeting would likely be appropriate.”

However, it added that “some judged that further increases were unlikely to be warranted.”

Despite the divergent views on the need for further policy tightening, there was agreement that rates would need to remain elevated until policymakers were confident that inflation was moving back toward 2%.

After the eleven hikes since March 2022, the Fed decided on the 20th to pause rate hikes, although it did not fully clarify whether future hikes would come at one of the two remaining meetings in 2023.

The Fed agreed that “policy should remain restrictive for some time until the Committee is confident that inflation is moving down sustainably toward its objective” and decided to keep rates between 5.25% and 5%, the highest level since 2001.

The minutes explain that all participants agreed that the Committee was in a position to proceed cautiously and that policy decisions at each meeting would continue to be based on new economic data and the balance of risks.

Last week it was announced that 336,000 jobs were created in September, 109,000 more than in August and the largest increase in employment in eight months, a figure that indicates that the labor market remains resilient despite the Fed’s decisions.

On Thursday, the Bureau of Labor Statistics will release inflation data for September, which will be fundamental to the Fed’s future decisions.

In August, the annual inflation rate in the United States accelerated for the second consecutive month to 3.7%, after 3.2% in July.EFE

pem/mcd/ics

Related Articles

Back to top button