Inflation in the USA has fallen sharply, but is still far too high.
(Photo: Bloomberg)
Washington After the interest rate pause in mid-June, the US Federal Reserve signaled another rate hike. “Almost all” members of the Monetary Policy Committee expected further hikes in 2023, according to the Minutes of the June 14 decision published on Wednesday.
After ten increases in a row, the US Federal Reserve has recently taken a break and maintained the key interest rate range of 5.0 to 5.25 percent. In March 2022, the interest rate was still just above the zero line. Since then, the Fed has raised interest rates sharply.
US Federal Reserve Chairman Jerome Powell recently described further interest rate hikes as likely to be necessary in the fight against high inflation. Initially, they only slowed down the pace of the increases. The future dates are crucial.
At the June meeting, the majority of monetary authorities voted in favor of an interest rate pause, according to the minutes. Most Fed executives thought it appropriate or acceptable to hold interest rates on hold for the time being.
With the interest rate pause, they wanted to gain time to be able to assess the economic progress on the way to the inflation target of around two percent. On the other hand, only “a few participants” wanted to continue raising the key interest rate, as price inflation had weakened only slowly.
The next Fed FOMC meeting to set interest rates is scheduled for July 25-26. .
The US inflation rate fell to 4.0 percent in May from 4.9 percent in April. Fed Chairman Jerome Powell said at the end of June that most Federal Reserve decision-makers expect at least two more rate hikes by the end of the year.
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