The Fed ignores the pressure of Trump and maintains the policy of gradual increase of the interest rate


The constant criticism of President Donald Trump failed to stop the Federal Reserve. At the end of its last monetary policy meeting, the Open Market Committee (FOMC) raised interest rates for the fourth time this year, and reaffirmed its policy of gradual increases for the coming year.

The Fed's decision comes in a context marked by strong asset risk aversion as a result of fears of a slowdown in the global economy. In fact, the central office reduced the projection of US GDP growth to 3.0% from the 3.1% indicated at the September meeting. In relation to the estimate for 2019, the entity projects a growth of 2.3% in relation to the previous 2.4%.

With this scenario, Fed Chairman Jerome Powell moderated the tone over the rate move for next year. "Many colleagues expected economic conditions to require three additional increases in 2019. We have reduced this somewhat because we believe the economy will grow in a way that requires two increases," Powell said at the post-announcement conference.

Despite this more subdued tone, the Fed maintained its policy of gradual interest rate increases. The statement released at the end of the meeting reaffirms the good health of the US labor market and the strong growth of the economy.

"Information received since the meeting of the Federal Open Market Committee in November indicates that the labor market continues to strengthen and that economic activity is increasing at a strong pace. Employment gains have been strong on average in recent months, and the unemployment rate remained low, "the report says.

In this context, the Committee concludes that "some incremental incremental increases in the target range for the federal funds rate will be consistent with
expansion of economic activity ".


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