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The FED: another rate increase is possible

In the United States for a two-day meeting of the Federal reserve system it may be decided to increase the basic discount rate by a quarter point.

10.Apr.17 2:49 AM
By Christina Orlina


The FED: another rate increase is possible

           Against the background of accelerating inflation and reducing unemployment, the US Central Bank predicts three rate hike this year against two expected.

          In late December, the regulator raised the benchmark interest rate for the second time after 2008.

         German analyst Robert Halver (Baader Bank) said: “In terms of the improvement of the economy the increase rate is possible. But more importantly, what will happen next. I am sure that Janet Yellen will continue its policy rates. In the future we should not expect radical increases, they will be minor and won't harm, because the Governor knows perfectly well — because of the volume of global debt, it is impossible the discount rate to be dramatically increased ”.

         At higher rates, the dollar usually strengthens markedly, and that in the short term the currencies of developing countries can “suffer”.

         In anticipation of the decision of the US Central Bank, the main stock indices of Europe are trading in red zone. Trading on the New York stock exchange opened with mixed dynamics quotes: Dow Jones, in particular, lost 0.5%.

         The Federal Reserve System, created on the basis of the Federal Reserve act of December 23, 1913, functions as a Central Bank. It implements the monetary policy of the United States by affecting the conditions of monetary circulation and the rate loan. The main goal in this is to achieve maximum employment of population, prevention of crises and the maintenance of inflation at a low level. The fed includes 12 regional banks in major cities (Boston, new York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas city, Dallas and San Francisco).

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