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Fed kept interest rate in the range of 1.5-1.75%

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Fed kept interest rate in the range of 1.5-1.75%
December 12
09:00 2019

The USA hasn’t changed the interest rate on federal funds rate, keeping it in the range of 1.5-1.75% per annum. This became known from the communiqué issued by the FOMC after the meeting taken place on December 10-11. The FOMC decision did not surprise the market, coinciding with analysts’ forecasts. The press release also mentioned that the labor market in the United States remained quite strong, and the growth rate of economic activity is restrained. In annual terms, both general inflation and inflation excluding food and fuel prices do not exceed two percent.

Fed statements have not changed much since the last meeting. Only the phrase that there is still some uncertainty regarding economic forecasts has disappeared.

Maximum employment and maintaining price stability is considered to be the goal by the FOMC. Keeping the interest rate in the range of 1.5-1.75% should help reach it. Experts believe that next year the situation with the rate will not fundamentally change. Most likely, the range will remain.

The Federal Reserve revised its forecast for unemployment for the year 2020 from 3.7% to 3.5%. The members of the committee have estimated the growth of national GDP in the region of 2% until 2023.

This was the last FOMC meeting in the outgoing year; the next session is scheduled for January 28-29, 2020.

 

The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group

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