The Federal Open Market Committee (FOMC) The Federal Reserve (Fed) of the United States decided to keep interest rates in the target range between 5.25% and 5.5%, at the highest level since January 2001, as reported on Wednesday. The Committee intends to achieve maximum employment and inflation at a rate of 2% in the long term. In support of these objectives, the Committee decided to maintain the target range for the federal funds rate between 5.25% and 5.50%,” the US central bank announced.
In this way, the institution decided to keep the monetary policy unchanged for the second consecutive meeting after the last increase of 25 basis points in the price of money made in July. The Fed’s decision comes after it was revealed last week that the world’s largest economy grew more than expected during the third quarter, when it registered an expansion of 1.2% compared to the second quarter, when GDP grew by 0.5%.
By your side, the interannual inflation rate stood at 3.7% in September, which repeated the increase in August, while the underlying rate, which does not include the effect of fluctuations in food and energy prices, reached 4.1%, two tenths lower than in August.
Likewise, the personal consumption expenditures price index, the Fed’s preferred statistic to monitor inflation, stood at 3.4% year-on-year in September, unchanged from August, while the underlying data closed the ninth month of 2023 with an increase of 3.7%, less than the tenth of the previous month.
In this sense, the Fed noted that recent indicators suggest that economic activity “expanded at a strong pace in the third quarter,” adding that employment growth has moderated since the beginning of the year but remained stable, and the unemployment rate remained down. Likewise, he acknowledged that inflation “remains high.”
