The US Federal Reserve's accompanying letter to the decision on the interest rate pause has been published.
Key points:
- The vote in favor of the decision to pause was unanimous.
- The Fed does not consider it advisable to reduce the rate until it is confident that inflation is steadily moving towards the target level of 2%.
- Inflation has decreased this year, but remains at a high level.
-Recent months have seen modest progress towards achieving the 2% inflation target.
- Risks to achieving the 2% inflation target have become more balanced.
- The Fed forecasts one interest rate cut in 2024, by 0.25 percentage points. And by another 1 percentage point in 2025.
- Job growth continues, unemployment remains low.
- Economic activity continues to grow at a strong pace.
- The US Federal Reserve will continue to reduce holdings of Treasury and mortgage securities.
- The US Federal Reserve will continue to monitor the impact of incoming macro data on economic prospects.