Fed Cut Rate is Steady: The Federal Reserve held short-term interest rates steady on Wednesday. And indicates that borrowing costs can be reduced in the next meeting in September as inflation as Inflation is getting closer to the U.S. central bank target of 2%. “There has been some further progress towards the Committee’s 2% objective,” the central bank’s Federal Open Market Committee said after the two-day policy meeting.
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As the officials didn’t make anything official maintained a neutral tone and showed concern about the economy in the upcoming future the steady drop in Inflation in the last few months marks the end of a long ongoing inflation war but there are many other concerns before the reduction could happen.
“The Committee judges that the risks to achieving its employment and inflation goals continue to move into better balance,” the Federal Open Market Committee said “Inflation has eased over the past year but remains somewhat elevated, In recent months, there has been some further progress toward the Committee’s 2 percent inflation objective.”
U.S. Central Bank said if there is any reduction it should be before Inflation returns to its target. The Economy has been going solid and job recruitment remains moderate, the unemployment rate remains low. And even if it’s low it is increasing at a decreasing rate which can catch up pace if not tackled on time, and policymakers are taking more concern on the matter.
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“If that test is met, a reduction in our policy rate could be on the table as soon as the next meeting in September,” Chair Jerome said. Even if there is no official announcement of any sort if the economy shows signs of ease it has continued for the past few months the borrowing cost is sure to be cut.
Powell’s statement has indicated that there has been some improvement unlike last month which was titled modest. And further cut down could be expected in November and December meetings.
“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” said Powell on a bit skeptical note.
