The US Federal Reserve has announced its interest rate decision

The US Federal Reserve (Fed) has announced its final interest rate decision of the year, which the entire world has been focused on. The Federal Open Market Committee (FOMC) kept the policy rate steady in the 5.25-5.50 percent range, as expected, maintaining the rate at its highest level in 22 years.

Markets will be following the press conference by Fed Chair Powell, which is expected to take place at 22:30 TSI. Clues regarding the bank's future monetary policy will be sought in Powell's forward guidance.

"WE WILL TAKE A RANGE OF ECONOMIC FACTORS INTO ACCOUNT"

The statement following the interest rate meeting is as follows:

"Policymakers expect weaker GDP growth and the same unemployment rate in 2024 compared to the September projections. Data indicated that economic activity slowed significantly in the third quarter. We will take a range of economic factors into account in determining the extent of any additional policy firming.

It is highly likely that tight financial and credit conditions will weigh on economic activity, employment, and inflation, but the extent of these effects remains uncertain."

FED'S MACROECONOMIC PROJECTIONS

US Federal Reserve (Fed) officials have revised their GDP forecast upward for this year and downward for next year. According to the "Economic Projection Report" released by the Fed, the 2023 GDP expectation was raised from 2.1 percent to 2.6 percent.

While Fed officials lowered their GDP expectation for next year from 1.5 percent to 1.4 percent, their expectation for 2025 remained at 1.8 percent, and the expectation for 2026 was raised from 1.8 percent to 1.9 percent. Fed officials kept their long-term GDP expectations at the 1.8 percent level.

Fed officials make forecasts every three months regarding the US unemployment, inflation, economic growth, and interest rates for the next three years and the long term.