The US Federal Reserve voted, on Wednesday, in favor of keeping interest rates at their highest level in 22 years, while expecting an additional increase before the end of the year to reduce inflation.
The central bank said, in a statement, that the Federal Reserve’s decision to keep the key lending rate between 5.25% and 5.50% gives officials time to “evaluate additional information and its implications for monetary policy.”
After raising interest rates 11 times since March last year, inflation has fallen sharply but remains above the Federal Reserve’s target of 2 percent annually, keeping pressure on officials to consider further action.
The Federal Reserve said on Wednesday that economic activity is expanding at a “strong pace,” pointing to increased jobs and a decline in the unemployment rate.
A group of positive economic data has raised hopes that policymakers will slow the pace of price increases, without causing a recession.
In addition to its decision on the interest rate, the Federal Open Market Committee (FOMC), which sets the interest rate, updated members’ expectations on a range of economic indicators, as well as expectations for future monetary policy.
Committee members left the average forecast for interest rates between 5.50% and 5.75%, while maintaining the possibility of raising interest rates by another quarter of a percentage point, before the end of the year.
They also raised expectations for next year’s interest rates by half a percentage point, indicating that the Fed expects interest rates to remain much higher for longer in order to bring inflation down to its target.
2023-09-20 19:09:41
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