After 10 consecutive increases, the Federal Reserve decided Wednesday to keep interest rates unchanged, and to temporarily stop the path of hawkish policy and turn to the path of “fixation”, in response to slowing inflation rates in the U.S.
The Open Market Committee of the Federal Reserve decided, at the conclusion of its meetings today, to fix the main interest rates at their current level, to remain between 5 and 5.25%.
Data, issued yesterday, revealed that the inflation rate in the United States fell to 4% in May, compared to 4.9% in the previous April, which was better than the predictions that expected it to drop to 4.1%, which encouraged decision-makers. In the US Federal Reserve today to stabilize interest rates at their current level.
As for the core US inflation rate, which excludes energy and food prices, the data showed a slowdown to 5.3% on an annual basis at the end of last May, compared to 5.5% in the previous April, which was in line with market expectations.
Regarding the labor market, data issued by the United States Census Bureau showed that employment in the non-agricultural sector increased by 339,000 jobs during the month of May, while expectations were for an increase of about 193,000 jobs only.
Unemployment rate increased to 3.7% last May, which was worse than expectations that predicted a rise to only 3.5 percent, compared to 3.4% during April.
Immediately after the decision to fix the interest rate, the main “Dow Jones” index fell by 150 points, or 0.44%, to reach the level of 34061 points, while the broader “Standard & Poor’s 500” index rose by 6 points, or 0.14%, to reach the level of 4375 points.
The "Nasdaq" technology index increased by 20 points, or 0.14%, to reach 13,593 points.
In the energy market, oil futures prices fell by 30 cents, or 0.43% to reach $69.12 a barrel.
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