The US central bank stressed that the Russian invasion of Ukraine has highly uncertain economic implications, but that in the short term the invasion and its related events could create additional upward pressures on inflation and weigh on economic activity.
In his statement, he considered that “continuous increases” in federal funds rates “will be appropriate” to curb the highest inflation in 40 years.
In its statement, the Fed said that inflation remains high, reflecting imbalances between supply and demand related to the pandemic, higher energy prices and broader price pressures.
GDP down
The agency also lowered its forecast for US economic growth for 2022 to 2.8%, from a previous estimate of 4%.
more inflation
Meanwhile, the Fed raised its 2022 inflation forecast to 4.3% from its previous estimate of 2.6%, and kept its unemployment forecast steady at 3.5% for this year.
The new statement says the Fed expects to start cutting its nearly $9 trillion balance sheet “at an upcoming meeting,” a topic likely to be addressed by Fed Chairman Jerome Powell at a news conference beginning at 12 p.m. :30 a.m.
St. Louis Fed President James Bullard was the only one who disagreed with the Fed’s decision.
With information from Reuters and AFP.
