The Federal Reserve decided not to change interest rates,
maintaining a cautious stance in the face of persistent inflation and economic uncertainties . Rates have ranged between 5.25% and 5.5% since July, with the understanding that higher rates could curb economic growth and moderate price increases. The Fed seeks to reduce demand to discourage rapidly rising prices, maintaining a balance between growth and controlling inflation.
Federal Reserve Chairman Jerome H. Powell highlighted that the effectiveness of monetary tightening measures has not yet been fully observed and that future decisions will depend on economic data and evolving risks. The discussion about the need for one last rate hike remains open, according to Powell.
Long-term interest rate market conditions influenced the Fed's decision,
with its recent rise making loans such as mortgages and business debt more expensive. This could, to some extent, contribute to the moderation of economic growth , making additional interest rate increases less necessary.
The Fed acknowledged that tighter financial conditions could affect economic growth,
employment and inflation. However, Powell expressed confidence that the rise of higher interest rates will not lead to an imminent recession.
The US economy has maintained a strong pace, with the job market still showing signs of resilience despite a slowdown in hiring and wage gains. Consumers continue to spend, which has contributed to economic growth.
In short, the Federal Reserve's decision to keep interest rates unchanged reflects a cautious approach to current economic dynamics. However, the possibility of a future increase remains under discussion. Based on the information presented, the prospect of an increase in interest rates at the next meeting has a good probability.