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Head of the Federal Reserve Bank of New York is waiting for another rate hike by the end of the year

One of the most influential officials of the Fed expects that the regulator will raise interest rates again this year and will soon begin to reduce the bonds on the balance sheet.

15.Aug.17 1:23 PM
By Daria Zaytseva


Head of the Federal Reserve Bank of New York is waiting for another rate hike by the end of the year

In an interview with Associated Press, the president of the Federal Reserve Bank of New York, William Dudley, close associate of the head of the Fed, Janet Yellen, also expressed his satisfaction that the administration of the U.S. president Donald Trump does not "politicize" the decisions of the American central bank, as some members of the Congress have done in recent years.

His comments on inflation and rates seem to have been a response to the growing skepticism in the financial markets regarding the possibility of raising the Fed's interest rates by December, and they provoked the dollar's growth and bond yields.

"It all depends on how the economic forecast will change," said Dudley AP, "If it changes in line with my expectations ... I will be in favor of another rate hike this year."

The Fed raised rates twice this year and is projected to have another increase. However, the decline in inflation in recent months to 1.5 percent, which is below the 2 percent target of the central bank, raised doubts among investors who are currently assessing the likelihood of an increase in the Fed rate of about 40 percent.

The Fed's plan is more confident about announcing the beginning of the reduction of assets on the balance sheet of $ 4.5 trillion, most of which was acquired in the midst of the financial crisis and the recession of 2007-2009. According to the official, the portfolio will fall to $ 2.5- $ 3.5 trillion in five years.

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