Washington, Jan 31 (EFE) – The Federal Reserve decided on Wednesday to maintain interest rates, but Chairman Jerome Powell pointed out that if inflation targets remain in check, there could be cuts later in the year.
Powell explained, “the Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%”.
However, the Fed seemed pleased with the latest economic data and signaled that if the positive outlook continues, it could begin to consider rate cuts toward the spring.
The US regulator kept interest rates between 5.25% and 5.5%, their highest level since 2001.
“The economic outlook is uncertain and we remain very attentive to inflation risk,” said Powell, who explained that the regulator will continue to make its decisions “meeting by meeting.”
The statement published by the Fed explains that the committee’s assessments will consider a wide range of information, including readings on labor market conditions, inflation pressures and inflationary expectations, and financial and international events.
of the Federal Open Market Committee, the body responsible for deciding whether or not to raise interest rates, decided after concluding a two-day meeting.
The Fed’s decision comes a few days after the United States announced that it closed 2023 with a gross domestic product growth of 3.1%, thanks to increased consumer spending despite inflation.
The figure is higher than estimated by economists and higher than the 2.1% growth recorded in 2022 when the world’s first economy suffered a technical recession.
GDP is one of the data points that the regulator closely analyzes, along with inflation, which stopped its downward trend in December, with prices slightly rising by 0.3% and ending the year at 3.4%.
This indicator had been falling year-on-year since October, and the rise was a setback for the Fed’s objective of bringing it down to 2%.
The US labor market is another data point analyzed by the Fed, and far from cooling, it remained solid.
In December, employment rose and 216,000 jobs were created, 43,000 more than the previous month, and the unemployment rate remained at 3.7%, a figure that does not seem to indicate that the labor market has suffered from the increase in interest rates. EFE
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