The US Federal Reserve is keeping the key interest rate high. The monetary authorities around Fed Chairman Jerome Powell left the key monetary policy rate in the range of 5.25 to 5.50 percent on Wednesday, as the Fed announced on Wednesday in Washington after a meeting of its committee responsible for interest rates.
The Federal Reserve has announced that it will cut interest rates this year, but does not want to act too quickly in order to avoid rekindling inflation. In May, the inflation rate fell by 0.1 percentage points to 3.3 percent. This is still a long way from the Fed’s inflation target of two percent. The better-than-expected inflation data had strengthened the financial markets’ assumption that the interest rate cut would go ahead on September 18.
The key interest rate in the USA has been at its current level since July. In the fight against high inflation, the Fed raised interest rates eleven times within 16 months – one of the fastest and sharpest periods of interest rate increases in its history.
Last week, the European Central Bank (ECB) was the first major central bank to reduce its historically high key interest rates by 0.25 percentage points each.
