Sunday , March 26 2023

Fed pauses on increase in rates


The Federal Open Market Committee (FOMC) of the Federal Reserve said interest rates remained unchanged at 2 to 2.25 percent, "corporate investment has eased the rapid expansion since it began."

The decision was unanimous in line with market expectations and warned that, like each announcement, economic expansion will continue to lead to a gradual rate hike.

In the seventh monetary presentation of the year, the Federal Reserve insisted that "economic activity in the United States remained firmly expanded."

"In recent months, earnings in employment have continued to be strong and unemployment has fallen, which has strongly increased household spending," he said.

However, according to analysts of Oxford Economics, they emphasized the devaluation of entrepreneurial fixed investment, supporting committee members' tendency to stop the upward trend in interest rate hike. But consulting experts warn of haphazard tones in 2019, although monetary language is limited.

Since December 2015, the US Central Bank has raised eight interest rate hikes. This year, Jerome Powell executives have been elected by the Fed.

Rise of December

Futures market estimates suggest a 93% rate hike in December after the announcement.

An internal investigation by FOMC members confirms the signal collected at the September dot-plot, which shows that a new rate hike can be made by the end of the year. Since it did not happen this time, expectation changed to December.

But they do not match the message collected in the same movement of dotted line, which increased three more times in 2019 in September. The futures market will bet only two increases next year.

I agree with Capital Economics strategists, who are expected to double their growth in the first half of 2019.

"By the middle of next year, we will write down to customers that economic activity will weaken below a potential level and allow the Fed to stop rising," he said.

According to the FOMC calendar, there will be financial conferences and presentations scheduled for December 18 and 19 this year, and the update of the so-called point charts will be released in the economic member countries' forecasts and economic trends.

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