The Federal Reserve (Fed) Announced its Interest Rate Decision
The Federal Reserve Bank of America (Fed) announced its interest rate decision,as expected by the market. Fed Chairman Bauer said at a press conference half an hour after the decision-making meeting that economic activity and employment in the United States have increased, and inflation has risen, but it mainly reflects temporary factors.
Fed Chairman Bauer stated that the US economic recovery is still uneven and the unemployment rate is still high. There is still a “long way” from achieving employment and inflation goals; now is not the time to discuss reducing the scale of debt purchases.
But Ball also said that the PCE index (the Fed’s preferred inflation indicator) is expected to exceed the 2% target recently, but it will only rise temporarily, and there is no need to raise interest rates. He also said that during the unblocking period, prices may have upward pressure, but that will only be temporary and will slow down afterwards; a one-time price increase is unlikely to lead to continued inflation.
But he said that if inflation is expected to far exceed 2%, the Fed will use tools to pull it down.
Bauer also mentioned the recent state of the US housing market. He said that the current housing market is definitely the strongest since the financial crisis. Pay attention to housing prices. The rise in housing prices is due to low inventory and strong demand. But he does not believe that housing prices will have an impact on financial stability.