US Federal Reserve puts interest rate hike on hold Conforama is fined 5,000 francs

The US Federal Reserve (Fed) will not raise interest rates any further for the time being. After ten consecutive increases, it leaves the policy rate unchanged in the corridor of 5.0 to 5.25 percent, the Fed announced on Wednesday after its rate meeting in Washington.

The Fed wants to fight inflation with its monetary policy. Inflation fell to 4.0 percent in May, after rising to just over 9 percent last year. The Fed is only targeting a rate of 2 percent.

In addition, the US Federal Reserve expects inflation to be slightly lower this year than assumed three months ago. Inflation is expected to average 3.2 percent in 2023, down 0.1 percentage point from the previous forecast in March.

However, core inflation, ie excluding food and energy prices, is expected to be slightly higher this year at 3.9 percent (expected March: 3.6 percent).

At the same time, the Fed expects economic growth to be slightly higher this year than previously forecast. The gross domestic product (GDP) of the world’s largest economy should therefore grow by one percent. That would be 0.6 percentage point more than predicted in March. The Fed forecasts growth of 1.1 percent next year. (sda/awp/dpa)