Fed keeps interest rates – The Economist

Analysts suggested that for the next meeting in March, the central bank did not increase their revenues.

The Fed said that economic conditions warrant only “gradual increase” in the rate. File photo: Reuters

The Open Market Committee (FOMC, for its acronym in English) Fed left unchanged its benchmark interest rate , fluctuating in a range of 0.25 to 0.50%, with a unanimous vote of the 10 participants.

In the press announcement of the first monetary year, the FOMC said that “economic growth in the United States has smoothing “since the last meeting in December, limiting the expectation that inflation will approach the target of 2% in the short term.

The committee said that economic conditions warrant” only gradual increases in the federal funds rate. ” However, note that the actual path of the federal funds rate will depend on the economic outlook for the coming weeks.

According to the statement, “The Committee continues to see risks to the performance of the activity US economic and, although the labor market is near equilibrium, is maintained at a low level. “

On inflation, he completed an annual rate of 0.7% in 2015, the second lowest in 50 years, “will remain low in the short term,” they detailed in the statement.

“Inflation will remain low in the short term, due to further declines in energy prices” but expected to rise to 2% over the medium term, as the temporary effects of lower energy prices and import dissipate. “

In addition, the inflation expectations for the medium term is tied to “a further strengthening of the labor market.”

These transients that are energy and import prices, as recorded in the data of the recent Fed Beige Book, consistently have affected the companies of that country, limiting their ability to create jobs.

anticipate less ups

Financial analysts at Deutsche Bank, BMO Capital Markets and Capital Markets believe the Fed statement outlines an economic and financial environment less friendly, with dynamic and robust rate hikes this year.

According to Joseph LaVorgna, an economist at DB for the United States, the message was soft Committee (dovish) and consistent the situation of market volatility.

“The committee can not raise rates while financial markets are not standing. And the markets can not find stability while the Fed’s intentions are not clear, “he said.

In fact, in the statement, the FOMC clearly warned that” continues to closely monitor the de-formance of the global economy and financial market and its impact on the labor market and inflation in the United States, allowing them to take stock of risks. “

In fact, the Director of Economic Analysis BMO Capital Markets, Gregory Michel, stressed that the FOMC is anticipating that deflationary pressures persist in the world economy and probably in March predicted that there will be no increase in tasa.En So Paul Ashworth, chief economist at Capital Economics, she said that The Fed is also seeing a decline in the Chinese market, which will impact the US economy.

“The Fed will continue its upward cycle until the second half of the year. Estimates that the federal funds rate will close 2016 in a range of 1.50 to 1.75 percent. “

ymorales@eleconomista.com.mx