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Fed concerns ease over state of global economy
2016-04-28 21:01:30 Post No. 41451
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Fed concerns ease over state of global economy
COPIED FROM THE FINA
2016-04-28 21:01:30
Post No. 41451
[Report]
http://www.ft.com/cms/s/0/ab6ce3ec-0ca0-11e6-b41f-0beb7e589515.html
Copied here in part to avoid the paywall...
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FED CONCERNS EASE OVER STATE OF GLOBAL ECONOMY
>>Central bank holds rates at 0.25-0.5%
>>Door open to further rise this year
Sem Fleming – Washington
>The Federal Reserve yesterday signaled that its concerns about global economic and financial hazards had eased since its meeting in March, leaving the door open to a second increase in interest rates later this year.
>The central bank held rates at 0.25 per cent to 0.5 per cent yesterday, as expected, noting a slowdown in US economic growth and more sluggish household spending.
>The Federal Open Market Committee struck out a reference in its last statement to international risks to the US economy due to an improvement in financial market sentiment and lessened concerns over Chinese policy.
>That suggested a short-term rates increase in the coming months, even if the timing remains uncertain.
>However the Fed also suggested that it remained on guard for another adverse turn of events abroad. "The Committee continues to closely monitor inflation indicators and global economic and financial developments," it said.
>Having pushed through a landmark rise in short-term interest rates in December, Fed chair Janet Yellen has since spelt out a cautious approach to monetary poilicy amid concerns about Chinese growth and low US inflation expectations.
>Uncertainty about the path of policy has been heightened by the UK referendum on its membership of the European Union a week after the Fed's June meeting; many investors argue a Fed move so soon to a potential market destabilising event would be hazardous.
>The median expectation from Fed policymakers' interest rate forecasts suggests the official rate will be lifted twice this year, with some analysts looking to June or July for the first of these moves and December for the second.
