In the United States, the Fed does not plan to change its rates in 2020

Fed Chairman Jerome Powell in Washington on December 11th.
Fed Chairman Jerome Powell in Washington on December 11th. ERIC BARADAT / AFP

The Fed will remain closed during the election campaign: the statement may sound pithy, but it summarizes the situation after the last meeting of the year of the US central bank. As expected, the institution chaired by Jerome Powell left, Wednesday, December 11, its key rates unchanged, in a range between 1.5% and 1.75%, after falling three times a quarter point in July, September and October.

Above all, she does not plan to change them in the coming months. Of the seventeen central bankers of the Fed, thirteen do not expect any rate changes in 2020, and four a small rise of a quarter point. The maneuver brings the Federal Reserve out of the political turmoil, while it has been criticized by Donald Trump this year for not having reduced its rent for money.

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Wednesday, too busy with the procedure of dismissal of which he is the subject, the President of the United States has not tweeted on the decision of the Fed, while the economic year ends on a positive note. Growth is expected to reach 2% in 2019, compared with 2.9% in 2018, according to the institution's projections. An encouraging result, when we remember that a year ago, in the middle of a stock market storm, the markets were waving the specter of a recession. The stock market has also increased since the beginning of the year, 20% for the Dow Jones and 23% for Nasdaq, the index rich in technology stocks.

Except Morgan Stanley, most banks anticipate a continuation of the rise of Wall Street in 2020. The investment is still at half-mast, but the fear of a generalized commercial war fades with the announcement of the ratification of a free trade agreement with Mexico and Canada. The Chinese case, it is bogged down, new customs duties are likely to come into effect at the end of the week. On the Brexit side, operators are waiting for the result of Thursday's general election in the United Kingdom.

205,000 jobs created per month

On the domestic front, US growth is driven by consumption, which accounts for 70% of gross domestic product (GDP), and unemployment, which is at its lowest level in half a century. This fell to 3.5% in November against 10% ten years ago. The pace of job creation remains very strong, at around 205,000 per month, although it is slightly lower than that of 2018 (223,000 per month). The good job figure is partly due to the end of the strike at General Motors, but the industrial sector remains anemic. Wages are up by just over 3.1%, including inflation, a figure that remains very moderate.

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