As expected, the US Federal Reserve (Fed) is leaving the key interest rate high. It remains in the range of 5.25 to 5.5 percent, the Central Bank Council announced in Washington on Wednesday. This is the highest level in more than twenty years.
However, new forecasts from the Fed indicate that there could be another increase in interest rates this year and that next year interest rates could be higher than previously expected. For the coming year, monetary authorities are expected to cut interest rates less than before. Instead of four cuts in the key interest rate, two cuts are now expected.
The Fed has raised the key interest rate eleven times through March 2022 in the fight against high inflation – most recently by 0.25 percentage points in July. This cycle is considered one of the fastest and most intense tightening periods in the Fed’s history. Only in June did monetary authorities take a break after ten consecutive hikes. Analysts were expecting another cut in interest rates.
