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WASHINGTON – Federal Reserve officials concluded last month that inflationary pressures were easing and the labor market was calming. They left the key interest rate unchanged for the third time in a row and announced plans to cut it three times in the future. 2024.
According to minutes of the Federal Reserve’s Dec. 12-13 meeting released yesterday, officials expected that a lower interest rate “would be appropriate through the end of 2024” given the progress made in combating inflation.
However, they added that “we emphasize the importance” of remaining vigilant and keeping interest rates high “until inflation clearly declines sustainably” and reaches the 2% target. And while Fed Chairman Jerome Powell suggested at a news conference after the meeting that the Fed would no longer raise interest rates, the minutes show that economic uncertainty remains and rate hikes remain possible.
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The central bank began raising interest rates in March 2022 to counter an inflation trend that began a year earlier. It has since raised its key interest rate 11-fold to 5.4%, a 22-year high.
The anti-inflation campaign is progressing, allowing the bank to keep its reference interest rate unchanged since July. Consumer prices were 3.1% higher in November than a year earlier, a sharp decline from 9.1% in June 2022, a four-decade high.
It was widely expected that interest rate hikes would trigger a recession in the United States, but to the surprise of many, both the economy and the labor market remained robust.
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The Federal Open Market Committee (FOMC) meeting held on the 12th and 13th of this month allowed us to learn…
The United States’ gross domestic product – the total of goods and services produced by the economy – grew at a robust annual rate of 4.9% between July and September, thanks to strong consumer spending and business investment. At last month’s meeting, some Fed officials noted that the economy appears to be slowing in late 2023.
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