Well, the Federal Reserve isn’t likely to raise interest rates in June. After nearly a year of hints and confidence among economists that the United States central bank would finally touch interest rates for the first time since 2008, Fed Chair Janet Yellen may bide her time a little longer.
Economists are now saying the Fed’s increase in interest rates will likely happen in September. The reason for this is that the Fed will have to try to spur inflation and boost the labor market after hiring experienced a hiccup in the first quarter of this year.
This week, heads of monetary policy will meet in Washington to discuss the impact of the harsh first quarter – the gross domestic product only grew 0.2 percent because of (supposedly) bad winter weather conditions – and a stronger dollar.
According to a Bloomberg survey, nearly three-quarters (73 percent) of 59 economists believe the first rate hike will transpire in September, this is up from 37 percent in a March survey, a time when many had predicted an increase in June.
Last month, the Fed removed the word “patience” from its monetary policy guidance in relation to raising interest rates. The central bank has noted that it will only boost rates if there are considerable gains in the labor market and inflation nears its two percent target.
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