The Fed steps in for the fourth time this year, placing the price of money between 2.25-2.5%
The Federal Open Market Committee (FOMC) of the United States Federal Reserve (Fed) has decided to raise the country’s interest rates by 75 basis points, to a target range of 2.25% and 2.5%, the highest level since December 2018 when the Fed also placed the price of money in this range, as reported on Wednesday.
In this way, the US central bank has fulfilled the predictions made by its president, Jerome Powell, at the monetary policy meeting in June, when he opened the door for another 75 basis point gain after the attack in that meeting.
The monetary organization has stressed that it considers more rate hikes appropriate in the coming months, although it has not specified how quickly they will rise or how long they will take place.
The Committee has assured that it is “very alert” to the risks posed by inflation. In addition, it has warned that it will continue to monitor the implications of the new economic data for the outlook and that it is ready to adjust all of its instruments if necessary.
On the other hand, the balance sheet reduction plans have remained unchanged. Between June and August, the reduction is $47,500 million per month, then it rises to $60,000 million.
The US labor market created 372,000 non-agricultural jobs in June. For its part, the unemployment rate remained at 3.6%, maintaining the labor recovery in a sustainable manner.
The country’s economy contracted 0.4% of GDP in the first quarter, according to the third estimate of data released by the Government Economic Analysis Office.
Similarly, the consumer spending price index, the Fed’s preferred variable to track inflation, stood at 6.3% last May compared to the same month last year. The monthly rate in the first month of the year was 0.6%, four tenths more than the month before.
The underlying variable, which excludes energy and food prices due to their increased volatility, came in at 0.3%, the same figure as in April, while the annual interest rate fell to 4.7%, two tenths less.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
