Concerns rise over Fed's lack of confidence on interest rate reductions
美 연준위원들 "인플레 진전 부족" 금리인하 지연 시사
South Korea is set to hold its interest rate decision meeting today.
Meanwhile, in the U.S., minutes from the last FOMC meeting suggested that there is a lack of confidence to push forward with interest rate reductions.
Our Ahn Sung-jin reports.
U.S. Federal Reserve officials have indicated that it may take longer than expected to see the interest rate come down.
Minutes from the most recent Federal Open Market Committee, which took place from April 30th to May 1st, were released on Thursday stating concerns over a lack of confidence in the slowing of inflation.
Inflation has been more stubborn than officials forecast at the beginning of this year.
The core personal consumption expenditures price index, a key indicator used in the U.S. to measure expenditure for goods and services, jumped point-5 percent on month in January, and point-3 percent in February and March.
That's above the Fed's target of a point-2 percent on month PCE increase if it's to meet its inflation goal of 2 percent.
"The short answer seems to be the Fed is not giving up on that target, but it's an arbitrary target based in some academic some practical research And if the Fed is unable to hit 2%, I would not be surprised to see if the goal posts move a bit closer to two and a half."
News of further prolonged inflation woes raised concerns on the market, with stocks down at the end of trading Wednesday despite a stronger-than-expected performance from Nvidia.
Nvidia's results have been a focal point for Wall Street as it holds more than 80 percent of the AI chip market.
During the day, the Nasdaq, S&P, and Dow Jones Industrial Average all jumped after the chip maker posted its fiscal first-quarter results.
However, all three major stock indexes dipped during the final hour of trading following the release of the FOMC minutes and a likely delay in cutting rates.
Ahn Sung-jin, Arirang News.
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2024-05-23, 09:00 (KST)