Source: AFP
A senior U.S. central bank official said on Friday that he does not expect any interest rate cuts this year after the recent rise in inflation.
The Federal Reserve has kept interest rates at a 23-year high for months as it struggles to bring elevated inflation back to its long-term target of 2 percent.
After easing significantly last year, inflation has accelerated once again since the start of the year, causing concern among Fed officials as they consider the right time to start cutting interest rates.
“I, at this point, have not written any cuts” for 2024, Fed Governor Michelle Bauman told Bloomberg News in an interview after an event in Texas, referring to policymakers’ quarterly economic forecasts.
“I expected to stay where we are longer. And that continues to be my bottom line,” added Bowman, who is one of 12 voting members on the Fed’s Federal Open Market Committee (FOMC). ).
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The median expectation among FOMC members in March was for three rate cuts this year — though some have since reversed their forecasts in light of subdued inflation data.
Last week, the FOMC voted to keep interest rates steady and said it does not expect to begin easing monetary policy until it has “greater confidence” that inflation is moving sustainably toward its target.
“It is likely that gaining this much confidence will take longer than previously expected,” Fed Chairman Jerome Powell told reporters after the decision was announced.
Futures traders are now assigning a little more than a 60 percent chance that the Fed will start cutting interest rates by mid-September, according to CME Group data — significantly later than their expectations just a few months ago.
Source: AFP