The American federal warns about reducing interest rates in 2024
US federal officials confirmed in their last meeting that they are not in a hurry to reduce interest rates, and expressed their optimism and warned them at the same time about inflation, according to the minutes of the session on Wednesday
The summary of the meeting pointed to a general feeling of optimism that the Federal Policy moves succeeded in reducing the inflation rate, which reached the mid -202 in 2022 in more than 40 years.
The officials expressed their concern that high inflation continues to harm families, especially those that have limited means to accommodate high prices
The results of the American Federal meeting for last January, which issued today, included some points among them, that recent indicators indicate that economic activity is expanding at a strong pace.
The American federal members indicated that the pace of job gains has declined since early last year, but it remained strong and that the unemployment rate remained low, as inflation declined during the past year, but it remains high.
Participants noted that inflation has declined during the past year, but it remained higher than the purpose of inflation that the committee set at 2%, and they are concerned that high inflation is still harmful to families, especially those that have limited means to accommodate high prices.
Participants believe that the long -term inflation expectations remained well at a level that corresponds to the purpose of inflation set by the committee at 2%.
Some participants pointed to reports received from contacts stating that companies cannot pass prices to consumers easily or that they are making prices less frequently than they were in recent years.
In their discussion of the families sector, the participants noted that consumer spending was stronger than expected, supported by low unemployment rates and strong income growth, and a number of participants saw that the growth of consumption was likely to moderate this year.
American federal members emphasized that the labor market is still strong, but demand and supply in that market continued to achieve a better balance.
Participants also referred to some other sources of upward risks of inflation, including potential disorders in supply chains due to geopolitical developments, potential recovery in basic commodity prices with the effects of improvements in the supply side, or the possibility of wage growth high.
The participants pointed out that the recent indicators indicate that economic activity is expanding at a strong pace, and job gains have declined since early last year, but they remained strong, and the unemployment rate has remained low.
In light of the current economic conditions and its repercussions on the prospects for economic activity and inflation, as well as the balance of risk, all the participants considered that it is appropriate to maintain the target scope of the interest rate on federal funds without changing this meeting.
All the participants saw that it was appropriate to continue to reduce the US Federal Reserve's acquisitions from securities.
American federal members believe that maintaining the current position of the policy is appropriate in light of the data received.
The participants pointed out that preserving the target scope of the interest rate on federal funds in this meeting would enhance more progress towards the committee's goals and allow additional information to be collected to evaluate this progress.
In discussing monetary policy expectations, American federal members saw that the interest rate is likely to be at its peak during the current tightening cycle in light of the low inflation during the year 2023 and the presence of increasing signs that demand and supply are achieving a better balance.
The American federal members in general indicated that it is not expected to reduce the target scope for the interest rate of federal funds is appropriate, so that they gain more confidence that inflation is moving sustainable about 2%.
The American federal members indicated that the future path of interest rate will depend on the data received, advanced expectations, and the balance of risk.
The American federal stressed the importance of continuing to communicate clearly on the committee's approach, which depends on data.
In discussing the considerations of risk management that could affect politics, the participants noted that while the risks threatening to achieve the goals of the committee related to employment and inflation began to achieve a better balance, they remained very aware of the risk of inflation.
Participants highlighted the uncertainty related to the period in which it will be required to preserve the position of restricted monetary policy.
Most American federal members talked about the risk of moving very quickly to facilitate monetary policy or reduce interest, and stressed the importance of making an accurate assessment of the data incoming to judge whether inflation is heading towards a sustainable decline to 2%.
However, some participants have pointed to the negative risks to the economy and associated with maintaining an excessive restricted position for a very long time.
American federal members noted that the continuous process to reduce the volume of the public budget of the US Federal Reserve was an important part of the general approach to achieve its goals in the field of macroeconomic economy and that the public budget return round has gone smoothly so far.
In discussing the considerations of risk management that could affect politics, the participants noted that while the risks threatening to achieve the goals of the committee related to employment and inflation began to achieve a better balance, they remained very aware of the risk of inflation.
Participants highlighted the uncertainty related to the period in which it will be required to preserve the position of restricted monetary policy.
Most American federal members talked about the risk of moving very quickly to facilitate monetary policy or reduce interest, and stressed the importance of making an accurate assessment of the data incoming to judge whether inflation is heading towards a sustainable decline to 2%.
However, some participants have pointed to the negative risks to the economy and associated with maintaining an excessive restricted position for a very long time.
American federal members noted that the continuous process to reduce the volume of the public budget of the US Federal Reserve was an important part of the general approach to achieve its goals in the field of macroeconomic economy and that the public budget return round has gone smoothly so far.
Many US federal members have suggested that it would be appropriate to start in -depth discussions on public budget issues at the next meeting of the committee to direct the final decision to slow the pace of the run -off.
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