Jerome Powell, chairman of the Federal Reserve, stated that the authorities were not in a hurry to lower interest rates, and the central bank has paused to see further progress in inflation following a series of interest rates last year. Added.
“Our policy stance is much less restricted than before and the economy remains powerful, so you don’t have to be in a hurry to adjust your policy attitude,” Powell said on Wednesday.
The Federal Open Market Committee has completely reduced the rate in the last few months of 2024, and voted on Wednesday to keep the Federal Fund to 4.25 % to 4.5 %.
In a statement after the meeting, the authorities repeated the mention that the inflation rate remained “slightly increased”, but deleted the advancement toward the 2 % goal. They also pointed out that they were stable at a low level of unemployment.
Combined with a solid labor market, powerful economic growth allows authorities to wait for further evidence of cooling inflation before adjusting the fee again. It also provides time to evaluate how President Donald Trump’s policy on immigration, tariffs, and taxes affects the economy.
Policy proprieters repeatedly, the risk of inflation and employment goals, “roughly balanced”, and the “range and timing” of additional charges depend on the incoming data and prospects.
This decision took place just a week after Trump’s inauguration ceremony. Trump, a frequent critic of the central bank, already suggests that he understands interest rates better than Powell. The Fed’s chief told reporters that he had not touched the president and refused to comment on his recent remarks that Trump did.
Labor market
The characteristics of the Labor Market Fed were different from the previous month’s policy statement, which was paying attention to the easing of the labor market and increasing the unemployment rate.
“The unemployment rate has been stable at a low level in the past few months, and the status of the labor market remains solid,” said the latest statement.
The Fed authorities want to maintain some lower pressure in the economy so that inflation is cooled by a 2 % goal, but the important questions for the current policy proppons are how much interest rates are now. Is it restricted?
Last month, the Fed officials have indicated that all in 2025 have reduced only two rates.
Policy creators will update the economy forecasts and fees at the next meeting in March.
Inflation outlook
The suspension of this month’s rate reduction occurs in the increase in uncertainty about how inflation evolves.
In the last few months in 2024, the progress of the central bank’s inflation target has stopped, but the new year has led to a sign that the downward trend may be immediately resumed.
The data released earlier this month showed that the fundamental scale of consumer prices rose lower than expected in December, marking the first step down in six months. It has been estimated that other data indicates that the number scheduled for Friday has risen by 0.2 % last month the core personal consumption expenditure price index that excludes food and energy.
At the same time, Trump’s tariff threats have inject uncertainty, and some economists warn that they are inflated, and other economists have the federal Christopher Waller -the impact on inflation. In general, it claims to be small and short -lived.
In December, Powell said that some Fed officials had begun to adopt potential government policies into economic forecasts. A few minutes after the gathering, the participants pointed out that the benefits of inflation have increased due to potential changes in trade and immigration policy.
At this week’s conference, the four regional Fed Bank presidents agreed with the central bank’s fee setting committee. The Chicago Federal Federation of President Austan Goursby, Boston Fried Susan Collins, St. Louis Fed’s Albert Musalem, President Jeff Schmidt will vote for policy in 2025. 。
The Fed has maintained a monthly maximum monthly limit on the monthly financial amount that enables mature monthly without reinvesting on $ 25 billion every month, and has maintained a $ 35 billion mortgage support securities.