(Washington) The American Federal Reserve (Fed) began its two-day meeting on Tuesday, during which it could decide to maintain rates in their current range, without ensuring that the cycle of increases has come to an end.
The meeting of the Monetary Policy Committee (FOMC) “started at 10:30 a.m. as planned,” a Fed spokesperson told AFP. It will end at midday on Wednesday.
The decision will be announced on Wednesday at 2 p.m. in a press release. Updated economic forecasts in terms of GDP growth, inflation, employment, and changes in rates will also be published.
The president of the institution Jerome Powell will hold a press conference half an hour later.
Almost all market participants expect the main key rate to remain in the range of 5.25 to 5.50%, in which it has been since the previous meeting at the end of July.
Rates have been raised 11 times since March 2022, a very rapid pace, intended to curb inflation that was at its highest in more than 40 years.
This has since slowed down significantly, despite further acceleration this summer. It stood at 3.7% year-on-year in August, according to the CPI index.
The Fed favors the PCE index, which it wants to bring back to around 2%, and in July was 3.3% year-on-year. August data will be released on September 29.
The situation also seems to be gradually rebalancing on the job market, after two years of labor shortage, which caused wages to soar. The unemployment rate rose to 3.8% in August, driven by an influx of new workers, which should help cool inflation.
As for consumption, the engine of American economic growth, it has been vigorous since the start of the COVID-19 crisis, fueling high inflation, but it seems to be showing first signs of weakness.
The Fed will meet in full for the first time since February, after the departure of former Vice-President Lael Brainard, who left to lead the White House team of economic advisers.
A Fed governor, Philip Jefferson, will succeed him, as recently confirmed by the Senate, which also validated the nomination of Adriana Kugler, United States representative to the World Bank, to the vacant seat of governor, becoming the first Fed official of Hispanic origin.