- Fed: interest rates remain stable. 2% inflation target
- Usa, the Federal Reserve cuts rates for the third time in 2019
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By Tiziana Di Giovannandrea 29 January 2020 At the end of the first meeting of 2020, the Federal Reserve substantially confirmed its monetary policy by keeping interest rates fixed between 1.5% and 1.75%. The decision was unanimously decreed by the members of its decision-making body, the FOMC (Federal Open Market Committee) commission.It was then decided to slightly raise the rate paid on some bank reserves from 1.55% to 1.6%.
The US Central Bank has reported that inflation remains low while the economy is growing at a "moderate rate". The current policy is considered adequate to support the return of inflation to the 2% target.
In particular, Fed Chairman Jerome Powell called himself "cautiously optimistic" on the global economy, on which "there is much more optimism, many analysts predict an acceleration of growth" also for "an easing of trade tensions" between USA and China. "There is still no rebound in the global economy, but there are signs that this is possible," said Powell. The signs that are there indicate that the growth of the global economy is stabilizing so fears about the hypothesis of a new world recession are removed.
Fed warns of coronavirus, 'global growth at risk'
Because of the coronavirus, the Fed raises an alarm as it believes global growth is at risk. Coronavirus, Powell said, "is a very serious problem," about which "I don't mean to speculate." However "we intend to monitor it carefully". "There is uncertainty about the macroeconomic effects of coronavirus," which "will have an impact in China, at least in the short term and probably also for their neighbors," he added. "We'll just have to see what the effects are globally."