The Federal Open Market Committee has foreshadowed a lengthy pause in the programme of US monetary easing that has been under way throughout this calendar year. Instead of significantly raising policy rates, as promised when the year began, there have been three “insurance” cuts of 25 basis points in US rates since midsummer.
In his press conference on Wednesday after the latest cut, the Federal Reserve chairman Jay Powell claimed that this adjustment has left US monetary policy “in a good place”. The Fed offered no guidance about the likely direction of the next move in rates, which it says will be determined by new economic data in coming months.
Mr Powell was asked whether he believes that the US monetary policy stance is now “accommodative”, which is a way of asking whether the Fed is seeking to encourage faster growth and higher inflation.