The US Federal Reserve decided to postpone the announcement of the date of raising the interest rate, in light of the increasing rise in inflation rates currently in the United States.
According to what was published by the American “CNBC” network, yesterday’s meeting, which was held by the “Federal Open Market Committee”, the committee responsible for determining monetary policies within the Council, resulted in significantly raising its expectations regarding the inflation rate in the country, as he expected that It rises to 3.4%, a full 1% higher than its latest inflation forecast, which was issued by the council last March.
The meeting also resulted in postponing the date set for raising the interest rate, without disclosing the new date. Moreover, the board also did not say when it would decide to undo the bond-buying program that the board is now actively pursuing, although Jerome Powell, the Federal Reserve Chairman, acknowledged that committee officials discussed the matter during yesterday’s meeting.
“You would think about this meeting that it included ‘talking about a meeting,'” Powell said. Powell deliberately used this phrase to recall a similar phrase he used in a statement he issued after a Board meeting last year, when he said the Board had not “contemplated considering a rate hike.”
Keeping the benchmark interest rate on short-term loans close to zero is an expected decision, and the committee took the decision unanimously, and that was also expected, but officials members of the committee indicated yesterday that a decision on the interest rate could be taken at an early date. It could be in 2023, after they said at the last March meeting that they don’t see the possibility of a rate hike until 2024 at the very least. Some individual expectations from members of the committee during yesterday’s meeting indicated the possibility of the committee deciding two interest rate hikes during 2023.
Although the members of the committee raised their expectations regarding the inflation rate, the committee’s statement issued after the end of the meeting continued to reiterate that the current inflationary pressures are “transient”, according to the expression used in the statement. It is worth noting that the prices of consumer goods in the United States are currently witnessing their highest increases in nearly 13 years.
Stock markets reacted negatively to the results of the board’s meeting, as stocks declined, and the price of an ounce of gold fell by $22, while the dollar rose and the yields on US government bonds rose with it, because investors were expecting the meeting to result in stricter policies from the board, including on For example, he decided to slow down the pace of his commitment to the bond purchase program during the current year, which did not happen.