The United States Federal Reserve it met market expectations and relaxed its monetary policy to control inflation in the world’s largest economy. This Wednesday, the monetary entity the reference data rose by 50 basis points.
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“The Committee will take into account the tightening of monetary policy”, as well as its lagged effects on economic and financial activity and inflation, said the entity after the announcement of the decision. A message that resembles the one delivered at the last meeting.
With this increase in the reference rate, the last for 2022, the interest rate in the United States remained at 4.5%.
This monetary policy decision comes a day after it was known that inflation in the US territory slowed to 7.1% in November from 7.7% last October.
(See: Annual inflation in the United States fell to 7.1% in November).
Monday and Tuesday the markets closed again in the green before the possibility of a relaxation of the measures and they remained in a positive register in the hours before the official announcement.
According to the CME FedWatch analysis tool, from the CME Group consultancy, 30.5% of analysts favored an increase of 50 basis points (bps), while 25.7% envisioned one of 75 basis points.
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Fed cuts GDP forecast for 2023
The Federal Reserve also took advantage of this day to reveal the new macroeconomic projections for the United States, an economy that is expected, according to international organizations, a considerable slowdown compared to the records of 2021.
According to the new projections, the Fed cut the projection of economic activity for next year to 0.5% from 1.2%, in line with what other entities such as the World Economic Fund and the World Bank.
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The GDP estimate also underwent changes for 2024, going from 1.7% projected in September to 1.6%. By 2025 it remained the same at 1.8%. It only improved by the end of the current 2022 from 0.2% to 0.5%.
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