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Fed will keep fire at interest rates as the global economy slows down



Flags fly over the headquarters of the Federal Reserve on a windy day in Washington, DC, May 26, 2017. Kevin Lamarck, Reuters

WASHINGTON – There is practically no chance that the US Federal Reserve will raise interest rates next week, as politicians, meanwhile, promised to keep their fire when the global economy slowed down.

With rising inflation, when economic growth in the US slowed down in 2019, economists also say that Federal Reserve officials will again lower rates

Fed Chairman Jerome Powell must announce the second political year of the year on Wednesday by the Federal Open Market Committee.

is now in the range of 2.25 to 2.5 percent, and the futures markets do not see any more bid rates in 201

9.

And now investors put a chance on one of three, that the central bank will cancel the direction and begin to reduce rates over the next 10 months. [19659003] Some economists warn that this is unlikely: with the fall in unemployment and ultimately rising wages, inflation can hold back as soon as summer, forcing the Fed to act.

But in a Congressional testimony last month, Powell said he expects a low Energy prices will further reduce inflation below the 2% Federal Reserve's target, at least for some time.

Other influential FOMC players also introduced a caveat: John Williams, president of the New York Federal Reserve, said this month, he expects economic growth to slow down "significantly" this year.

And Federal Reserve governor Lael Brynard said that the time has come for a "period of vigilance" regarding politics. Brainard – known as the "pigeon", which is less aggressive in raising rates, has offered the Fed to continue raising rates until 2019, without stopping to staying at "neutral" rates that neither stimulate nor slow down the economy

ONE PRINT NEXT?

"This is a completely different world," said Cathy Bostanchic, Head of the US Macro-Investors Division at Oxford Economics.

"I think they were surprised that inflation has not risen above."

The December breakdown of Wall Street, when the S & P 500 lost almost 10 percent of its value, fears that the Fed would continue hiking, became a learning moment, said Bostanchic.

I think that all this together led them to what they will say we will dwell for a while, "she said.

Her firm, like many others, has reduced its forecast to a single increase this year – with 2 – and expects the first. – quarterly economic growth decelerates to 0.7 percent, its slowest pace over the past three years

Growth in jobs stopped in February, but on average remained good, while the housing sector is showing signs of recovery.

Meanwhile, production and consumer spending fell sharply. The main issue remains the degree of slowing down in China and Europe.

But Joseph Gignon, a senior fellow at the Peterson Institute for International Economics, said the US growth should be stronger over the rest of the year, which is unlikely the Federal Reserve will lower the average forecast for raising rates in 2019 to zero.

"They think that slowing down is now below potential," he told Fed politicians.

"If the economy continues at 2%, which still justifies another increase in rates at a certain point."


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