(Finance) – The Federal Reserve takes a break and leaves unchanged, for the first time in 15 months, interest rates. After ten consecutive hikes, the central bank keeps the cost of money steady in the 5%-5.25% range.
As feared by analysts, in the statement released at the end of the FOMC, the directorate that governs monetary policy, the institution specified that will evaluate if further increases are needed – which therefore does not exclude, but neither does it indicate as inevitable – based on what will be the effects of the increases already implemented.
Inflation remains “high” and the Fed expects rates of 5.6% at the end of 2023 and 4.6% in 2024 – reads the dot plot, the tables attached to the final statement of the two-day meeting – which seem point to at least two more rate hikes this year.
“Future actions” on interest rates “will depend on the impact of the tightening and on economic and financial developments” – says the Fed – assuring that it is ready to review its monetary policy as appropriate if risks emerge that could prevent the achievement of the objectives of price stability and maximum employment.
Tomorrow the ECB is expecting a new increase in the reference rates by 25 basis points, with which the reference on the main refinancing operations would rise to 4%.
Growth estimates revised upwards
The Federal Reserve sharply revised its economic growth forecasts upwards for this year, but trimmed those for the next two years downwards. And, at the same time, he limited his inflation expectations for this year to 3.2%, one decimal place less than the March forecasts, while he confirmed the estimate for 2024 at 2.5% and that for 2025 at 2.1%.
As for GDP, the US Central Bank now forecasts an expansion of 1% this year (from +0.4% estimated in March) which should be followed by +1.1% in 2024 and +1.8% in 2025 .