The US Federal Reserve (Fed) decided to keep interest rates within a target range of 5.25% to 5.5% for the sixth straight meeting, at the highest level since January 2001, the institution said this Wednesday.
“The committee decided to maintain the federal rate target range between 5.25% and 5.5%. In considering any adjustment to the target rate range, the committee will carefully evaluate incoming data, evolving prospects, and the balance of risks,” the Fed’s governing body, the Federal Open Market Committee (FOMC), announced. ).
Accordingly, the Committee advised that it did not consider it appropriate to reduce the target range until there was greater confidence that inflation was moving sustainably towards 2%.
He also stressed that he would continue to monitor the implications of incoming information for the economic outlook to assess the appropriate monetary policy stance, adding that he would be prepared to adjust the monetary policy stance as necessary if risks emerged that could impede economic development . achievements of goals.
To address the rising cost of living, the US central bank, led by Jerome Powell, raised interest rates eleven times in a row between March 2022 and July 2023.
Last week, the Commerce Department’s Bureau of Economic Analysis reported that the personal consumption expenditure price index, the Fed’s preferred statistic for monitoring inflation, was 2.7% annualized in March, up two-tenths from February. .
At the same time, U.S. gross domestic product (GDP) increased 0.4% in the first quarter of the year, half of the 0.8% increase in the fourth quarter of 2023, according to the first estimate released by the Office. Economic analysis of the Department of Commerce. On an annualized basis, the US economy grew 1.6% between January and March, compared with 3.4% in the previous three months.
By deciding to keep rates on hold on Wednesday, the Fed leaves the European Central Bank (ECB) free to take the lead in turning around the monetary cycle after the custodian of the euro expressed its readiness to make its first rate cut in June. if there are no surprises in the incoming data.
In this sense, the ECB’s Governing Council plans to meet again to discuss eurozone monetary policy on June 6, while the Federal Open Market Committee will not do so until June 12.
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