White House sees room for unchanged interest rates in the US and inflation under control
Kevin Hassett, of the National Economic Council, says the Fed may maintain interest rates at the December meeting after higher-than-expected GDP.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM INFOMONEY · 2 MIN
The White House sees room for the Federal Reserve (Fed, US central bank) to keep interest rates unchanged at the December meeting, with inflation under control. The assessment came from Kevin Hassett, director of the National Economic Council, according to InfoMoney.
Hassett spoke to Fox Business on Thursday, 29. The context cited is a higher-than-expected 3rd quarter US GDP, which serves as a backdrop for the discussion on the next monetary decision.
When addressing the conduct of the central bank, Hassett cited Warsh as Fed chairman and said he will lead the committee to a prudent, data-driven decision. The mention gives the market a name to follow in the coming months.
The most sensitive point is in the caveat. If growth and inflation remain high, the argument for an interest rate hike would be significant at the next meeting. If growth is not driven by the supply side, Hassett assessed that there is room to keep interest rates and inflation under control.
At stake is the credibility of a scenario in which interest rates do not need to rise to contain inflation. The speech by a member of the White House does not define the rate, which is up to the Fed, but indicates how part of the government reads the data that will come.
What changes for the investor
For those who follow the stock market, Nasdaq, interest rates and the dollar, the message is to pay attention to the next growth and inflation numbers, as the source itself conditions the maintenance of interest rates on these data. If the rate stays where it is, the focus tends to shift to the inflation trajectory. If growth and inflation remain high, rising interest rates will return to the table, with possible effects on risky assets and exchange rates. This is a map of how the debate is organized, not a price prediction. From the perspective of fiscal responsibility and discipline that guides this section, the central point is data-based decisions.
Automatically translated from Portuguese.
