Interest rates in the US. The Fed made an important decision – Money.pl

2015-04-29 8:50

Author: (DS) (TUL)

Janet Yellen, the head of the Fed [photo: International Monetary Fund]

US central bank left interest rates unchanged. The decision is not a surprise to the market, which expects that they will be raised no earlier than September of this year.

Update 20:33

The communication published today we can read that weak data on GDP growth in the first quarter of this year (+0.2 percent) are caused by weather factors and are temporary. Also added that the Fed does not rule out interest rate rises already at its June meeting.

Interest rates in the United States are almost zero. The extent to which they are ultimately was set at 0-0.25 percent. Any increase depends on the situation on the labor market and inflation. While the unemployment rate is already at a low level of 5.5 percent, prices are rising already well below 2 per cent target. Moreover, in March year-on-year, prices of consumer goods fell by 0.1 percent.

After an earlier meeting of the Fed statement said that rate hikes are possible if noticed will be further improvement in the labor market and inflation will return to 2-percent target in the medium term. This time also repeated the record.

The Federal Reserve recently lowered its economic growth forecasts for the United States for the years 2015-2017 as compared to the December projection. The forecast for 2015. Was reduced to 2.3-2.7 percent. (From 2.6-3.0 per cent. In the December projection), for 2016 year. The Fed also expects the unemployment rate this year will reach 5.0-5.2 percent. (Compared to 5.2-5.3 percent. Expected in December).

– Until recently, the dominant view was that this increase will take place in June this year. However, the last series of disappointing data from the US meant that many market participants began to doubt the possibility of a rate hike so soon – says Paul Grubiak, investment advisor Superfund TFI. The expert notes that for leaving interest rates unchanged for a long period of time is also supported by the fact that other major economies of the world situation is uneasy.

Maintaining a low level of interest rates is conducive to weakening the US dollar, and thus – having increased trading of gold. Also in stock markets, such a scenario will favor buying the shares. A month ago, after the announcement of the Fed decision and the occurrence president Janet Yellen, the stock market on Wall Street has appreciated more than 1 percent.