- US central bank maintains policy rate in 3.50%-3.75% range
- Policymakers project higher inflation, still see one rate cut in 2026
- War with Iran adds to uncertainty of Fed’s outlook
And the possibility that the Fed’s next move “might be an increase did come up at the meeting as it did at the last meeting,” Powell said, though he added that the “vast majority” of the officials don’t have that outcome as their base case.
Monetary policy, he repeated, is “well positioned to determine the extent and timing of additional adjustments to our policy rate based on the incoming data, evolving outlook, and the balance of risks.”
Powell’s remarks prompted traders to pile into bets that the Fed will wait until next year to cut rates. U.S. stocks slumped, with the S&P 500 index .SPX falling about 1.4% to its lowest close in nearly four months. The dollar jumped against a basket of currencies while U.S. Treasury yields rose.
The Fed is in the difficult position of needing to balance the risk of higher inflation amid a fresh shock and downside risks to the labor market, said Powell, whose term as Fed chief ends in May.
Regards,
Mario
In Spanish
