Oil prices remain within range amidst less possibility of dip in rates, know more

Following Street predictions, the benchmark interest rates were kept at 5.25 to 5.50 percent for the fourth consecutive meeting.

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Following a two-day meeting of the Federal Open Market Committee (FOMC), the US Federal Reserve revealed its interest rate decision on January 31. Post Street predictions, the benchmark interest rates were kept at 5.25 to 5.50 percent for the fourth consecutive meeting.

After its first policy-setting meeting of the year, the US central bank unanimously decided to maintain the policy rate at its 23-year high, but stated it “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward two per cent.”

US Fed decision

US Fed Policy: FOMC votes unanimously to keep key rates unchanged at  5.25-5.5% for second straight meeting | Mint

Along with stating that the “risks to achieving its employment and inflation goals are moving into better balance,” the rate-setting panel ended a two-year period in which it had been biased toward raising rates and viewed the risks as being more closely aligned with those posed by rising prices.

“Inflation has eased over the past year, but remains elevated,” Fed mentioned further reiterating “remain highly attentive to inflation risks.”

The terms under which the Fed would consider “any additional policy firming,” terminology that barred any consideration of rate decreases, were outlined in the preceding statement that the Fed released in December 2023.

The central bank has maintained the policy rate on hold since July as inflation approaches its objective, following a 5.25 percentage point increase in March 2022.

Will it affect crude oil prices?

Crude oil processing 9% lower in August due to weaker demand | Zee Business

It is currently anticipated that US Federal Reserve policymakers will delay reducing interest rates. This might limit the demand for oil and slow economic growth. It also caused the currency to rise to three-month highs.

The demand for oil worldwide is expected to increase by 1.85 million barrels per day (bpd) in 2025 and 2.25 million bpd in 2024, according to a monthly report from the Organization of the Petroleum Exporting Countries.

The two predictions from last month remained the same.OPEC increased its estimates for both years’ economic growth and held to its prediction that the world’s oil demand will grow relatively quickly in 2024 and 2025, citing additional upside potential.

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