The Fed raised its reference interest rates to maximums in more than 22 years to contain inflation and placed it between 5.25% and 5.50%.
High rates make credit more expensive and discourage consumption and investment, while reducing price pressures.
Inflation has fallen and is progressively converging on the US central bank’s 2% annual target, according to Joe Biden’s government. Independent and conservative analysts do not think the same.
Inflation remains high and recent data indicate that the path towards the Fed’s goal continues with serious obstacles, which are ignored by government agencies and minimized to the maximum by the left-wing press, aligned with the White House.
“If the economy evolves as we expect, it will be appropriate to begin easing (monetary) policy at some point this year,” Powell said, according to his speech prepared for members of the House Financial Services Committee, which will host the first of two periodic hearings of the head of the Central Bank this Wednesday. On Thursday Powell will go to the Senate.
The economic outlook is uncertain
“The economic outlook is uncertain, and continued progress toward our 2% target is not assured,” said the president of the Central Bank.
Lawmakers are expected to insist on asking Powell for some timetable for the start of the rate cuts that markets are anxiously awaiting.
In December, Fed officials outlined the possibility of three rate cuts this year, but did not give a possible time window.
Powell reiterates in his speech that the Fed remains “committed to lowering inflation,” after for more than a year he said that inflation was temporary and remained inactive in the face of levels that grew each month. It seemed that the government wanted to allow inflation.
Futures traders assign a chance of just over 70% that the Fed will begin cutting rates in mid-June, according to data compiled by CME Group.
Now the press insists on putting pressure on the Federal Reserve to lower rates from the beginning of 2023, but there was no reaction to the Fed’s inaction for 14 consecutive months and a price escalation that became the worst in the last almost five decades in the US.
Source: With information from AFP.
