Washington (Reuters) – The US Federal Reserve has moved a step closer to the first rate hike in nearly a decade.
Fed officials referred to its meeting in July point to improvements in the US labor market. However, they mentioned also worried about the continuing low inflation and weak growth in the global economy, as emerged from the published protocols on Wednesday night of the meeting. A Fed officials attended willing to vote for a rate hike. Another group of participants saw the conditions for an increase either already given or expected to be reached shortly. Clear statements whether a step now takes place in September, the logs but not contained.
The key interest rates in the US are now since the global financial crisis in late 2008 at a record low of zero to 0.25 percent. Fed chief Janet Yellen had the door for the last rate hike already wide open. Fed officials said, in August of that the point of increase is at hand.
According to the records of many meeting participants expressed the view that the US economy was headed for full employment. However, almost all Members wanted to only have even more evidence that growth is strong enough and the labor market has also strengthened enough. Only then there is plenty of optimism for a return of inflation to the target rate. The Fed aims in the medium term to an inflation rate of about two percent.
So far, many investors expected, due mostly positive US economic data the rate hike in September. For example, 215,000 new jobs were created in July in the US. In addition, US companies increased their production in July surprisingly strong. However, was due to declining oil prices, inflation in July as in June at just 0.2 percent.
In addition, due to the recent turmoil in China came on in the meantime some doubt as a step in September. The Chinese government had devalued the national currency, the yuan, which sent shockwaves through the world’s markets. This happened only after the Fed meeting in July. Fed chief Yellen will need to consider the situation in China at the next rate-setting meeting on September 16 and 17.
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