Amid mounting economic uncertainties in the United States, the latest meeting of the Federal Open Market Committee FOMC revealed a cautious stance by the Federal Reserve. With inflationary pressures persisting and signs of economic slowdown emerging, policymakers are walking a tightrope, weighing the risks of acting too soon against the dangers of inaction.
As U.S. President Donald Trump returns to office, the Federal Reserve faces mounting political pressure to reduce interest rates. However, all indicators suggest that the central bank will maintain its cautious approach, preserving its independence despite the increasingly tense political climate.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3-3/4 to 4 percent.
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