Economic overview in the USA

The FED (Federal Reserve System) , the US central banking system, broke its streak of 10 interest rate hikes in a row over the past 15 months after the two-day FOMC monetary committee meeting. The Fed decided to postpone the interest rate hike from June to July. The US central bank made the decision on a day-to-day basis, setting interest rates at 5.6% by the end of this year. This is 50 basis points above the current level. The Fed chief himself, J. Powell, also confirmed the decision. The expected interest rate hike is expected to follow in July. The only thing that could discourage this would be a catastrophic monthly labour market report (negative payrolls), or another collapse of one of the smaller regional banks in the US. Something like that, however, is not something US central bankers can count on in the base case.

The Fed’s Congress set three key objectives for monetary policy in the Federal Reserve Act: maximising employment, stabilising prices and easing long-term interest rates. The first two goals are sometimes referred to as the Federal Reserve’s dual mandate. Its responsibilities have expanded over the years and now include supervising and regulating banks, maintaining the stability of the financial system, and providing financial services to depository institutions , the U.S. government, and foreign official institutions. The Fed also conducts economic research and provides numerous publications through the FRED database.

Interest rate movements have