Photo: esgrimaempresarial.mx
By Isaac Cohen*
Even though last week the central bank of the United States left interest rates unchanged, at the highest level in two decades, the stock market continued setting a record. Perhaps this is in recognition of an economy that continues growing, at more than 2 percent, while the unemployment rate remains under 4 percent, the lowest in almost fifty years.
However, the explanation offered by the central bank chairman Jerome Powell, for maintaining the restrictive monetary policy posture, focused on the latest inflation figures. Given that the declining inflation trend of the second half of last year was interrupted by a slight acceleration during last January and February. Chairman Powell said although this does not change “the overall story… of inflation moving down gradually,” they need to know if “this is a bump on the road or something more.” This will give them the “confidence” that inflation continues to decline toward the 2 percent goal.
Therefore, the projections released at the end of last week’s meeting still anticipate two or three reductions in interest rates in what is left of this year, while inflation is projected to reach 2.4 percent this year and 2.1 percent in 2025. The next Open Market Committee meeting is scheduled for April 30-May 1.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO, and other media.
