Fed may pause tightening monetary policy in September

After the minutes of the Federal Reserve policy meeting (Fed) announced last week, strategists at the second largest US bank, Bank of America, said that the Fed may pause tightening monetary policy in September if economic growth slows and the rate of inflation declines. inflation fell.

All of the Fed’s policymakers agreed to raise rates by half a percentage point at the May policy meeting to combat inflation, and most participants agreed that the rate hike would be a modest one. That degree in June and July may be appropriate.

However, the minutes of the meeting also show that the Fed is grappling with how best to reduce inflation without triggering a recession or pushing unemployment significantly higher, which is a challenging task. some participants said.

Bank of America said that they may be witnessing a small but noticeable change in the communication of the Fed. In which, some officials proposed the option of suspending interest rate increases at the end of the year when interest rates reach 1.75 – 2% in the challenging macro context.

Futures traders are betting the Fed, which acts as the US central bank, will deliver rate hikes by 50 basis points at each of its June and July policy meetings. and another 25 basis point rally in September.

The Fed emphasizes its determination to control inflation

VTV.vn – According to the minutes of the new policy meeting released on May 25, the FED emphasized its commitment and determination in controlling the rapidly increasing inflation by raising interest rates by larger.

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