Fed keeps rates to a week of elections in the US – The Day online

The Federal Reserve maintained stable rates of interest on Wednesday, in the latest decision on monetary policy before the presidential elections in the united States, but noted that it could raise rates in December as the economy gains momentum and inflation accelerates.

The central bank said that the economy was strengthening and that the progress of the job are solid. The officials also voiced greater confidence in inflation moving towards its goal of 2 percent.

“The Committee (Open Market) considers the arguments for a rate hike of the federal funds have continued to strengthen, but decided, for the moment, wait for more evidence of progress towards their goals,” said the Fed in a statement after a two-day meeting prior to the election of November 8 in the united States.

The text suggests that it is likely that the Fed raise the rate at its last monetary policy meeting of the year in mid-December.

The greater confidence that consumer prices are rising is reflected in his view that “inflation has accelerated somewhat since the beginning of the year”, and in the removal of the communication of a reference prior to that inflation was kept low in the short term.

The president of the Fed of Kansas, Esther George, and his pair of Cleveland, Loretta Mester, spoke out against the decision Wednesday and called for an immediate upside. Both were among the three officials who had differed as in the previous meeting.

The decision comes less than a week of the presidential election in the country, that are increasingly being perceived an uncertain outcome. Investors had already ruled out a hike at this meeting, but hope in a large majority that the Fed would raise the costs of the credit the next month.

The head of the central bank, Janet Yellen, said in September that it was likely an increase in rates before the end of the year, provided that the employment and inflation in the country continue to strengthen.

Since then, employment growth has continued at a solid rate and inflation has advanced, placing both near the long-term objectives of the Fed. The economy has also gained momentum, with a growth in the annual rate of 2.9 percent in the third quarter, after a slow expansion in the first half of the year.

The Fed has kept its interest rate at a day for loans between banks in a range between 0.25 per cent and 0.50 per cent since last December, when he raised the federal funds for the first time in nearly a decade.

then, comments from analysts about the decision:

Brian Jacobsen, strategist, portfolio manager Wells Fargo Funds Management, Menomonne Falls, Wisconsin: “The Fed (…) suggests that you need a little more evidence of progress towards their goals. Some reports more jobs might help, so that December is the most likely scenario” for a rise in interest rates”.

Alfonso Esparza, a strategist, monetary, senior, at Oanda in Toronto: “there Was a rod very low for this meeting of the Federal Open Market Committee (FOMC), due to that all of at this time are in search of news on the election (presidential) in the united States. We are reaching full employment, there really is no chance of the numbers working to move the needle, so that all the weight is shifted to the indicators of inflation.

are Not guaranteed a rate hike in December, but neither took it out of the table. When it does not relate directly, I think that (the possibility of an increase next month) is very much on the table yet.”