The bank stressed that it has "greater confidence" that inflation is converging steadily with the price stability target of 2% and that the risks to optimising employment and inflation are "more or less balanced".
The Federal Open Market Committee (FOMC) of the United States Federal Reserve (Fed) decided on Wednesday to lower interest rates by 50 basis points for the first time since March 2020, leaving them within the target range of 4.75% to 5%.
In its statement, the bank stressed that it has "greater confidence" that inflation is converging steadily with the price stability target of 2% and that the risks to optimising employment and inflation are "more or less balanced".
"Recent indicators suggest that economic activity has continued to grow at a good pace. Job growth has slowed and the unemployment rate has risen but remains low. Inflation has continued to move toward the Committee's 2% target but remains somewhat elevated," the Fed said.
The FOMC has indicated that when modifying the reference rate it will be attentive to incoming data, the evolution of the macroeconomic environment and the balance of risks.
In this regard, the issuing institute has assured that it will be "prepared" to adjust rates if necessary, for which it will analyze the readings of the labor market, inflation, as well as the effects derived from international and financial events.
On the other hand, all members of the Committee voted in favour of the half-point cut, except for Michelle Bowman, who belongs to the ' hawkish ' wing of the Fed, that is, in favour of a less accommodative monetary policy.
GDP, UNEMPLOYMENT AND INFLATION
The economy of the world's leading power experienced an annualized growth of 3% of its GDP in the second quarter of 2024, compared to 1.4% in the previous quarter.
As for the US labor market, 142,000 non-farm jobs were created in August, while unemployment fell by one-tenth of a point to 4.2%. The US has now been creating jobs for 44 consecutive months.
The personal consumption expenditures price index, the Fed's preferred statistic for monitoring inflation, stood at 2.5% in July, unchanged from the previous month. The monthly rate edged up to 0.2% from 0.1%. The underlying variable closed at 2.6% year-on-year, unchanged.
