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| The US Federal Reserve (Fed). (Photo: AP) |
After a two-day meeting, the Fed decided to keep its policy rate unchanged in the range of 5.25-5.50%, while updated forecasts showed that 12 of the agency's 19 policymakers supported another rate hike in 2023 to ensure inflation continues to slow.
The bank also forecasts less monetary policy easing in 2024, thanks to the strength of the economy and labor market.
Fed policymakers expect the policy rate to fall to 5.1% by the end of 2024, up from the agency's last forecast in June 2023 of 4.6%.
Regarding inflation, the Fed believes that inflation in the US will fall below 3% in 2024 and return to 2% in 2026. However, the agency forecasts that the US economic growth rate will slow in 2024, down to 1.5%, after adjusting the growth rate in 2023 to 2.1%.
Data released since the Fed’s last meeting in late July 2023 have generally shown that the U.S. labor market and consumer spending have remained solid despite rising interest rates, while core inflation has continued to slow. However, there are still many obstacles for policymakers to consider.
Following the decision, the US dollar rose against the euro and other major currencies, while all three major indexes on Wall Street closed in the red.
The Dow Jones Industrial Average fell 0.2% to 34,440.88 points. The S&P 500 Composite Index fell 0.9% to 4,402.20 points. The Nasdaq technology index fell 1.5% to 13,469.13 points.
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