The US central bank (Fed) has kept constant interest rates on Thursday, but continues to say that it will gradually increase in the future.
From our correspondent in Washington.
Wall Street counterfeits and medium-term election results do not meet the intentions of the Federal Reserve. As expected, the United States central bank did not change its key interest rate on Thursday night. On the other hand, his statement continues to indicate that the federal funds rate could increase in the near future. "Increasing additional funding would be in line with long-term economic growth, a strong labor market and our inflation target," says the text. "The labor market has continued to strengthen and … economic activity has grown rapidly," notes Jay Powell and his colleagues. However, they also conclude that investment "has slowed down from its high level at the beginning of the year", which may be a pull-up of growth.
READ OUT – Fed increases the rate for the third time in 2018
Although the growth in the third quarter has reached 3, 5% per annum, and the US economy has created another 250,000 jobs in October, most investors are foreseeing a fourth upgrade next year at the next meeting of the Fed's Monetary Committee, December 18-19.
The Central Bank's monetary committee is convinced that the economy is able to withstand a gradual increase in prices, but inflation does not provide signs of solid acceleration. It is true that the range of federal funds – the rate at which the Fed allows liquidity to be provided in the short term is from 2 to 2, 25%, which is still historically low.
Briefly disappointed Jay Powell
In recent weeks, President Trump has repeatedly accused the federal government of being "crazy" and raising the interest rate too quickly without any valid reason. He also said he was disappointed with Jay Powell, whom he himself chose to run the Fed.
READ OUT – Donald Trump criticizes Fed policy
The president of America has an extremely rare understanding of the Fed and his boss. The central bank has the power to be independent of political parties and work on a currency to maximize employment in the context of price stability. Wall Street, initially surprised by Donald Trump's critique, largely ignored this phenomenon. First and foremost, we see populist election rhetoric, not a genuine attempt to force the Fed.
The non-productive part of these criticisms is often highlighted. The President's brief commentary could not have encouraged the federal government to reduce the rates, rather than forcing the Fed to show its independence, accelerating its growth. We do not have it yet. Inflation in the last twelve months was 2%, and this is exactly what the Fed is trying to achieve. The surprise of many countries, including the central bank, the rapid drop in unemployment, high job creation and labor shortages have so far not contributed to wage growth.