The US Federal Reserve (Fed) of the United States left the interest rate without changes, preserving it at a 23-year maximum of 5.25-5.50 percent.
In the statement published by the Fed after a two -day meeting of the Federal Open Market Committee (FOMC), it is said that the decision to leave the interest rate was unanimous.
The statement reports that the latest indicators indicate a “sustainable” expansion of economic activity.
Employment growth rates have slowed down since the beginning of last year, but remain high, the statement said, while the unemployment level remains low, and inflation, despite the decrease, remains high.
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The statement notes that FOMC strives for maximum employment and 2 percent inflation in the long term. The Committee believes that the risks to achieve these goals were established in a more favorable ratio.
According to the Fed, the economic prospects are “uncertain” and that FOMC continues to be extremely careful about inflationary risks. “In order to maintain these goals, it was decided to maintain a bet on federal funds in the range of 5.25-5.50 percent. The committee does not imply that a decrease in the discount rate will be appropriate until there is confidence that inflation is steadily moving to 2 percent, ”the statement says.
The document notes that the bank will continue to reduce its reserves of treasury bonds, corporate debt obligations and mortgage securities, as was planned earlier, and confirms that it firmly intends to reduce inflation to a target level of 2 percent.
– lack of changes in interest rates during 4 meetings in a row
The Fed, under the conditions of high inflation in the United States, began to increase interest rates by completing the operation to purchase assets in 2022. Since March 2022, the Fed made a total of 11 increase in interest rates and increased them a total of 525 basic points.
As a result of these increase, the bank accounting rate increased to 5.25-5.50 percent, which is the highest level since 2001.
The latest decision of the Fed left the interest rate without changes for 4 meetings in a row, leaving it in the current range. The last time the bank raised the rate by 25 basic points in July 2023.
In the USA in December last year, it amounted to 3.4 percent in annual calculus, after in June 2022 it reached the maximum level since 1981 – 9 percent in annual calculus.