The US Federal Reserve raised interest rates by 50 basis points to a range between 4.25% and 4.5%, an increase less than the 75 basis points it approved in the last 4 meetings, according to a statement from the Fed yesterday, Wednesday.
The US Federal Reserve also raised its interest rate expectations, likely to end 2023 at an average of 5.1%, compared to an average of 4.6% in its forecast in September. And that the average interest rate will reach 4.1% in 2024 from 3.9% in its previous forecast.
The rate of inflation in America slowed on an annual basis during the month of November 2022, as it recorded 7.1%, compared to 7.7% in the previous October, according to data from the US Bureau of Labor Statistics issued last Tuesday. On a monthly basis, inflation recorded 0.1% in November, compared to 0.4% in October.
November's reading was lower than expected, as a Reuters poll indicated that the annual inflation rate would drop to 7.3% only, and that the monthly inflation rate would drop to 0.3%.
On the other hand, the Federal Reserve raised its forecast for the growth of the US economy to 0.5%, compared to 0.2% in its previous forecast in September, and lowered its forecast for growth in 2023 to 0.5%, compared to 1.2% in its forecast in September.
The US Federal Reserve expected the unemployment rate to reach 3.7% in 2022, compared to September expectations of 3.8%, and to record 4.6% in 2023, compared to September expectations of 4.4%.
The US Federal Reserve also raised its inflation forecast for personal spending in 2022 to 5.6%, compared to 5.4% in September forecasts, as well as in 2023, to 3.1%, compared to 2.8% in September forecasts.
