As expected, the Federal Reserve’s Open Market Committee kept its key interest rate unchanged between 5.25 and 5.50 percent.
After the announcement of the decision, US government interest rates rose and the dollar strengthened. Stock indices continued to rise strongly, as they had been all day.
“Recent indicators suggest that economic activity has continued to grow at a steady pace. Job growth has slowed, and the unemployment rate has risen, but still remains low. Inflation has moderated over the past year, but is still somewhat elevated. In recent months, more progress has been made towards the committee’s two percent inflation target,” the central bank says in its announcement.
Previously, the statement focused only on inflation risks, now the Fed said it will also monitor its second objective, namely employment.
According to the Fed, “the economic outlook remains uncertain, and the committee is alert to risks to both of its twin objectives.”
The Fed’s job is to protect price stability, but also to promote full employment. So far, the central bank feels that the economy is in good shape.
“The committee estimates that the risks of achieving the employment and inflation targets are increasingly better balanced,” the release said.
The Fed’s statement also says, as usual, that it does not expect interest rate cuts to be appropriate until it has greater confidence that inflation is on its way to 2 percent in a sustainable manner.
Source: www.arvopaperi.fi
