China News Agency, New York, March 3rd. The US Federal Reserve Board released the semi-annual "Monetary Policy Report" (hereinafter referred to as the "Report") on the 3rd, emphasizing its firm commitment to reducing the inflation rate to the target level of 2%, and said that it will continue to A rate hike would be appropriate.
Although inflation in the U.S. has moderated since mid-2022 as supply bottlenecks ease and energy prices fall, it remains well above the Fed's 2% target, the report said.
At present, the relationship between supply and demand in the labor market remains tense, employment growth is strong, the unemployment rate is at a historically low level, and nominal wage growth is still at a high level.
A period of below-trend economic growth and a cooling labor market may be needed to bring inflation back to 2 percent.
The report said that in order to curb inflation, the Federal Reserve continued to rapidly increase the federal funds rate and reduce the size of its balance sheet.
Since June 2022, the Fed has raised the target range for the federal funds rate by a further 3 percentage points, bringing the target range to 4.5% to 4.75%, and expects such continued increases to be appropriate.
Meanwhile, the Fed also reduced its holdings of about $500 billion in U.S. Treasury bonds, agency debt, and agency mortgage-backed securities.
The report noted that the Federal Reserve is well aware of the enormous hardship that high inflation poses, especially for those least able to afford higher-priced necessities.
The Fed remains firmly committed to bringing inflation down to its 2% target.
From the 21st to the 22nd of this month, the Federal Reserve will hold its second regular monetary policy meeting this year.
At that time, Fed officials will discuss the next policy action based on the latest reports on employment and inflation.
The market predicts that the Federal Reserve may announce another 25 basis points in interest rates after this regular meeting.
According to Bloomberg News, a number of Fed officials with monetary policy voting rights have recently warned that if the US economic data is stronger than expected, the Fed may raise interest rates more than previously expected.
Among them, Fed Governor Waller said on the 2nd that if the employment and inflation data cool down, "then I will support raising interest rates two to three times, that is, the peak of the federal funds rate is expected to be between 5.1% and 5.4%", but if these report data "Too hot", then the Fed must raise interest rates further.
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