US rates may remain unchanged
(16 November 2009 – USA) US economists expect the Federal Reserve to not raise interest rates until around September 2010.
A survey was conducted by the Wall Street Journal and of the economists who answered the questions 30 out of 50 of the economist said that the central bank will raise interest rates at the right time.
Confidence in the US is at a high for the Federal Reserve to manage the economy.
While 18 said the Federal Reserve will be too slow, this contrasts with the wide spread criticism of the Federal Reserve has encountered over timing in the past.
Most of the economists said the Federal Reserve will not raise rates until the third quarter of 2010 at the earliest.
Futures markets indicated that there is a 90 percent chance of a rate increase in August next year.
Dean Maki, Barclays said that after a year of growth, the portion of the easing meant to curtail depression will be taken away, however the Federal Reserve is unlikely to raise rates until the unemployment rate is on a decisive downward trend.
If the Federal Reserve raises rates in September, it would come just six weeks before the mid-term election. The central bank values its independence from the political process, especially on monetary policy, but it could be feeling pressure to maintain its easing stance amid high joblessness.
Confidence in the US is at a high for the Federal Reserve to manage the economy.
While 18 said the Federal Reserve will be too slow, this contrasts with the wide spread criticism of the Federal Reserve has encountered over timing in the past.
Most of the economists said the Federal Reserve will not raise rates until the third quarter of 2010 at the earliest.
Futures markets indicated that there is a 90 percent chance of a rate increase in August next year.
Dean Maki, Barclays said that after a year of growth, the portion of the easing meant to curtail depression will be taken away, however the Federal Reserve is unlikely to raise rates until the unemployment rate is on a decisive downward trend.
If the Federal Reserve raises rates in September, it would come just six weeks before the mid-term election. The central bank values its independence from the political process, especially on monetary policy, but it could be feeling pressure to maintain its easing stance amid high joblessness.
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