In the latest meeting of the Federal Reserve, the decision to keep the target range for the federal funds rate at its 22-year high, between 5.25% and 5.5%, was confirmed. This announcement marks the second consecutive confirmation of this choice, highlighting the dual focus of policymakers on stabilizing inflation at 2% and preventing excessive monetary tightening.
Policy makers emphasized that the evaluation of the opportunity for further monetary policy tightening would take into account the cumulative impact of previous interest rate hikes. Additionally, the recognition of the time lags associated with the influence of monetary policy on economic activity and inflation was underscored.
During the press conference following the meeting, Federal Reserve Chairman Jerome Powell indicated that the September dot-plot, which showed the majority of participants forecasting another rate hike this year, may no longer be accurate in light of recent developments. Powell also clarified that, at present, the possibility of rate cuts has not been discussed, with the primary focus remaining on assessing the need for further rate hikes.
In summary, the Federal Reserve is carefully managing economic dynamics, seeking a balance between inflation control and support for economic activity. The central bank's next moves will be closely influenced by ongoing developments in the economy and financial markets.