The Federal Reserve held its interest rates unchanged on Wednesday, indicating it's open to begin cutting but not necessarily in the near future.
For the fourth consecutive time, the central bank kept its benchmark federal funds rate at 5.25%-5,50%, a 22-year-high.
The statement that followed the two-day meeting dropped the possibility of a future hike and said that "inflation goals are moving into better balance."
However, it added, the Federal Open Market 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%."
The Fed also reaffirmed its long-term goals and monetary policy strategy, including a 2% average inflation target.
Prices in the United States are moving in that direction following a steep monetary tightening campaign, with its preferred measure (the core Personal Consumption Expenditures price index) dropping to 2.6% in the latest reading.
The economy is also showing strength, as the GDP showed a better-than-expected performance in the fourth quarter in 2023: it grew by 3.3% compared to the 2% expected by economists in Wall Street. The FOMC described economic activity as "expanding at a solid pace."
As for the labor market, the FOMC said that "job gains have moderated since early last year but remain strong, and the unemployment rate has remained low." Moving forward, the Fed added, it will "carefully assess incoming data, the evolving outlook, and the balance of risks."
"The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals," the Fed concluded.
© 2024 Latin Times. All rights reserved. Do not reproduce without permission.
