Fed extends interest rate pause - Highest level in 22 years: US Federal Reserve leaves interest rates unchanged despite signs of falling consumer spending.

Fed extends interest rate pause - Highest level in 22 years: US Federal Reserve leaves interest rates unchanged despite signs of falling consumer spending.

The US Federal Reserve has decided to leave interest rates unchanged for the second time in a row. The key monetary policy rate remains in the range of 5.25 to 5.50 percent, which is the highest interest rate level since 2001 and thus for 22 years. The Fed has made a series of interest rate increases in recent years to curb high inflation. However, there are signs of declining consumer spending, which could potentially impact future interest rate policy.

According to a report by n-tv.de, the Fed can now be more patient after its aggressive series of hikes as financing conditions have tightened and financial markets are already moving in the desired direction. However, it remains uncertain whether further interest rate hikes will follow. High inflation continues and consumer prices rose 3.7 percent in September, matching the previous month's pace. However, the Fed is aiming for a value of 2.0 percent.

Higher interest rates can curb price increases, but they also have an impact on consumer spending, a key pillar of the U.S. economy. It is becoming more expensive to buy houses or cars on credit. Although inflation is still above the Fed's target, it is weakening while economic growth is high. This is an unusual situation from the perspective of some experts. Compared to the previous quarter, the gross domestic product in the USA rose by an annualized 4.9 percent in the summer, the strongest growth in seven quarters.

However, the stable economy and high growth pose the risk of inflation accelerating again. It remains to be seen whether the Fed will consider further interest rate increases necessary in the future. Some experts are already speculating about possible interest rate hikes in December or next year if the economy remains strong. On the other hand, however, there are signs of rising loan defaults and tightening consumer finances, which could suggest that consumer spending could cool even without further interest rate hikes.

It therefore remains to be seen how the Fed's interest rate policy and consumer spending will develop in the coming months.