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Corsera USA economy The Fed leaves interest rates unchanged

The Fed leaves interest rates unchanged.

The cost of money remains between 5.25% and 5.50%.

  The Fed also decided to slow the speed of reducing its balance sheet, in a move that will ease pressure on the Treasury Department and on Treasury issuance.

From June the Fed will impose a ceiling of 25 billion dollars a month on Treasuries, from the current 60, keeping that of mortgage-backed securities at 35 billion.
“Recent indicators suggest that economic activity has continued to expand. The labor market remains strong, and the unemployment rate low. Inflation has slowed over the past year but remains high. In recent months there has been a lack of progress towards the 2% objective", states the Fed in the statement released at the end of the two-day meeting. “We do not expect it will be appropriate to reduce rates until we have greater confidence in the trajectory of inflation towards the 2% target,” the Fed highlights.
     "The next move is unlikely to be an interest rate hike" but gaining the "confidence" to cut the cost of borrowing will take longer than expected. This was stated by Fed President Jerome Powell, underlining that inflation remains too high.
"Monetary policy is restrictive and is weighing on demand" but also on the labor market which, although "solid, has cooled", adds Powell.


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