The Fed will not touch rates, and cut its estimates of Gdp in the Usa – The Republic

MILAN The Federal Reserve has decided to keep rates unchanged at 0,25-0,5%. This is the sixth time in a row, since the last time he decided to close on the cost of money was December 2015. It was the first rise since June 2006. The rise in interest rates on that occasion was of 25 basis points up until then had remained steady at the historic low to which they were brought in December of 2008 following the worst financial crisis since that of 1929. Now the chance of a rise in interest rates were reinforced, but it is not yet time to intervene. The Fed has decided to wait for further confirmations on the Us recovery, although the decision was not taken unanimously: the three members of the Fed have, in fact, voted against, the highest number in 2014.

“The decision not to raise rates does not reflect a lack of confidence in the economy,” said Janet Yellen, the governor of the Federal reserve, in the course of the press conference following the end of the meeting of the central Bank. According to Yellen a “cautious approach” on interest rates is “appropriate”. The Fed “expects only one narrow gradual”, and says that monetary policy today is seen as a “moderately accommodative”. Need more evidence that the economy is strengthening further to a rate increase. The chairman explained that the unemployment rate is “pretty close” to the rate that is compatible with the definition of full employment.

actually, Many people think that before the end of the year the Fed will intervene on the cost of money, only adjusting upward the rates. By 2017, however, the Fed expects two interest rate increases, one less than the three estimated in June. The estimate is contained in the tables (the so-called ‘dot plot’) that accompany the final communiqué and the decisions of the monetary policy. Three rate increases planned for 2018. “Monetary policy remains accommodative, supporting, therefore, a further improvement in labour market conditions and of the return [of the annual growth of inflation to 2%”.

On the front of the economy, the Fomc, the operational arm of the bank, has revised downwards the Us Gdp to the end of 2016, bringing the growth forecast to 1.8% from previous +2%. Unchanged at +2% forecasts to 2017 and 2018. As for the work, this year the rate of unemployment is expected to be 4.8%, 4.7% expected in June. Filed also the forecasts oninflation Usa for 2016. The estimate is now for a +1.3% compared to the previous year, against the 1.4% forecast made in June last. The central bank has left unchanged the estimates on the consumer price index, for 2017 and 1.9% in 2018 2%.

Topics:

the Fed

exchange rates Usa

Gdp Usa

Starring:

Janet Yellen