Wednesday, November 2, 2016

U.S. central bank maintains expectations for interest rate increases in December – Express

The american Federal Reserve, the central bank of the United States, continues to feed the expectation that if it shall decide by an increase in interest rates in the last meeting of the monetary policy before the end of the year. The communiqué of the meeting that ended this Wednesday around the stop signs in this direction, still maintaining the traditional writing cautious that its president, Janet Yellen, was printed.

The Monetary Policy Committee (FOMC, the acronym in English), to which Yellen chairs, considers that the option for an increase of interest rates on the federal "continued to strengthen". But, decided in this meeting, once more, that "for now, you have to wait for more evidence of a continuous progress towards your objectives" of employment, full and closer to the inflation target of 2%.

This time, the vote against shortened to two opposing, Esther L. George, Loretta J. Mester, which if hit by an increase in the range between 0.5% and 0.75%. The president of the Federal Reserve of Boston, Eric Rosengren, who had aligned with the two at the meeting of 21 September has now been moved to the field of the majority, decided to wait as the remaining seven of the committee.

The maintenance of interest rates in the range between 0.25% and 0.5% was expected by the financial markets, so much so that the team of Janet Yellen met just less than a week of the presidential elections, which are shrouded in increasing uncertainty as to the winner on the 8th of November. If you realise a decision to climb the 13 and 14 December, this will occur a year after the first stir since December 2008, when rates were lowered to near zero percent.

But even that are increased in December, the strategy will continue that which has been set by Yellen since the beginning – gradually increasing, within the perspective that "rates are likely to remain, for some time, below levels that are expected to prevail in the long term."

In the futures market of interest rates of the Fed, the probability of a decision to increase interest rates in December rose to 71,5%, according to data from CME Group.

In the macroeconomic framework, the inflation rate rose to 1.5% in September, the highest since January. The economy is near full employment, with the unemployment rate at 5% at the end of September. An increase of one tenth relative to the previous three months. The annual growth rate rose to 2.9% between July and September, a leap compared to 0.8% in the first and 1.4% in the second quarter.


No comments:

Post a Comment