The Federal Reserve (Fed) approved a 0.25% interest rate hike at the end of its two-day meeting, saying the hike will continue next month as the fight against inflation continues.
This decision comes after another six consecutive rises, with four of 0.75%, which has put the price of money, from zero or almost, in the range between 4.50 and 4.75%. In doing so, he set the fastest pace of Fed rate hikes since the early 1980s, four decades ago.
Those responsible for the US central bank, who voted unanimously for this new increase, underlined the progress made to stop the rise in prices and their decline, as seen in the latest data, which left it at 6.5% after having climbed to 9, 1% last June. But it does not seem to significantly change the agenda that has been set with a policy of even more rate hikes.
The announcement was well received by the stock market, although there were voices that expected signs of a future without increases. The Nasdaq entered positive, like the Dow Jones, which recovered more than 400 points.
"The committee anticipates new increases, appropriately, to reach a sufficiently restrictive monetary policy stance," he stressed in his statement, with language similar to that applied by the Fed since March, when they got down to work after despising the underlying problem of inflation.
The president of the Reserve, Jerome Powell, remarked in the subsequent press conference that the institution will do everything in its power and that they will not cease their efforts until the healthy framework of a 2% recession is reached. So "it would be premature to declare victory," he insisted. "The work is not finished yet, we still do not see disinflation, there are signs but it has not happened," he stressed.
“The job is not done yet, we don't see disinflation yet. It has not happened, ”she stressed. And he cited inflationary problems in the real estate sector as an indicator that that point has not been reached. "It is not a question of being optimistic or pessimistic, but of seeing disinflation soon begin in the price of items and in real estate," he continued. "Inflation remains at a very high level, well above the target," he insisted, despite the progress made and the fact that it is considered that the peak of the increase in prices has been exceeded.
"There are signs of disinflation underway, but we are at an early stage," he added. In his argument, he recalled that already at the end of 2021 “we expected disinflation, but the situation lasted throughout 2022.
"This is not the usual standard, inflation is longer and deeper than what is observed," he stressed. “We still don't see the moment to pause the increases”, she declared.
Powell struck a positive tone, saying that "there is a gratifying disinflation underway while there continues to be a strong job market." Job growth has proven very resilient in the face of the Fed's tightening. “The forecasts are that unemployment will go up a bit,” he added. There are no salary increases in sight either, so it points to a "soft landing".
