After the FOMC meeting, it became known that the base rate remained at the same level, that is, 2.25% – 2.5% per year. Experts and analysts predicted this result.
The Federal Reserve decided to reduce the rate on excess reserves. It has decreased by 0.05%. This step is needed to maintain the base rate within the limits set by the US Central Bank.
The report of the committee says that the labor market continues to strengthen, and economic activity sho ws a good growth with low unemployment.
At the same time, there is a decline in consumer spending and the volume of business investment in fixed assets.
General inflation, as well as inflation excluding prices for products and fuel, has fallen to the point below 2%. Previously, inflation was estimated as “close to 2%”.
Inflation expectations were almost unchanged, while offsetting inflation rates were low.
The main rate has remained at the same level, because the main duty of the FOMC is to assist people in finding employment and developing measures aimed at maintaining price stability.
The Fed wants to maintain a steady increase in economic activity and the labor market, as well as leave the inflation at around 2%. For these purposes, the FOMC plans to keep the loan rate at the current level in the near future.
The need and size of future changes will be assessed on the basis of the created and expected economic conditions. They must meet the goal: maximum employment and keeping inflation at around 2%.
All members of the FOMC have voted to maintain the current parameters of the monetary policy.
The next meeting will be held in mid-June. After the data on the outcome of the Fed meeting, the US stock market increased its growth. Dow Jones has grown by 0.24%, S & P 500 – by 0.21%, Nasdaq – by 0.52%.
The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade