The Federal Reserve predicted this Wednesday in his Beige book economic outlook that in the coming months there will be “less restrictive financial conditions”, an indication that interest rates could fall before the end of the year.
“The outlook for future economic growth remained generally positive” and “expectations of stronger demand and less restrictive financial conditions were observed over the next 6 to 12 months,” states the text published this Wednesday.
The Beige Book is a publication by the US regulator that analyzes the current economic conditions of the 12 districts into which the Fed divides the country, based on qualitative information collected by each reserve.
In a framework of high interest rates, which have remained in the range of 5.25% to 5.5% since July, their highest level since 2001, the Fed stated that in recent months the demand for loans “remained stable or fell,” depending on the areas, and credit quality “was generally healthy despite some reports of increased delinquencies.”
The Fed published the Beige Book on the same day that the president of the US central bank, Jerome Powellappeared in Congress to explain, like every six months, the regulator’s decisions on monetary policy.
Powell stated that the agency will decide “carefully and thoughtfully” when to lower interest rates, a decision that will be made “sometime this year,” once it is certain that inflation is being reduced on a sustained basis.
The Beige Book also analyzed economic activity and the Fed noted that it “increased slightly” since early January. Eight districts recorded slight to modest growth in activity, three others recorded no change and one noted a slight weakening.
The Fed also talked about maritime shipping disruptions in the Red Sea and the Panama Canal, which “generally did not have a notable impact on businesses during the reporting period,” although “increasing pressures on international shipping costs” are being documented. EFE (I)
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