Fed leaves interest rates unchanged, revealing inflation in world's largest economy

On July 31 local time (early morning of August 1 Vietnam time), after a two-day policy meeting, the US Federal Reserve (Fed) decided to continue keeping interest rates at the current level.

The Fed decided to keep the benchmark interest rate in the range of 5.25% - 5.50%. (Source: Reuters)

In a statement released at the end of the meeting, the Fed decided to keep its benchmark interest rate in the range of 5.25% - 5.50%, while noting that inflation continued to show some progress towards the agency's 2% target.

The steady decline in inflation in recent months has fueled a broad consensus among Fed policymakers that the inflation war is nearing an end.

The agency assessed that inflation is now only "increasing slightly", a significant change from the "rising" inflation assessment that the agency has often used in recent times.

In addition, the Fed said that the economy continued to grow at a solid pace, while job growth had slowed and unemployment remained low. The bank also shifted its focus from solely on "inflation risks" to "risks to its dual mandate," which is to maintain full employment consistent with stable prices.

In its statement, the Fed did not commit to cutting interest rates in September and reiterated that policymakers still need "greater confidence that inflation is progressing sustainably toward the 2% target" before lowering borrowing costs.

However, changes in the Fed's latest policy statement appear to be consistent with that belief and are reinforcing investors' expectations that the bank will begin cutting interest rates at its next policy meeting in September.

Source: https://baoquocte.vn/fed-khong-thay-doi-lai-suat-he-lo-tinh-trang-lam-phat-cua-nen-kinh-te-lon-nhat-the-gioi-280875.html