Fedchefen Janet Yellen. Photo: Manuel Balce Ceneta/AP
NEW YORK. again and again in the year, the Fed has seemed to be heading towards a tightening of the u.s. economy, only get to see the chance disappear for various reasons. If there has been, at times, weak statistics on the labour market, so has the threat of brexit, weak industrisiffror, or any other factor made that the Fed is forced to remain with the current level of interest rates at low 0.25–0.50 per cent.
Not at the september monthly räntemöte, which ended on Wednesday, there was a tightening.
"the Labour market has continued to be strengthened, and the growth in economic activity has increased from the low level synthesis during the first half of the year," writes the Fed in its interest rate decisions.
Consumption has also increased, while the level of investment is still low. And job growth fell in August. In addition, lagging inflation is still well below the target of 2 per cent.
positive signs still is visible in the u.s. economy is however not sufficient for the Fed, with its head Janet Yellen, should have the courage to pull the räntespaken.
But the Fed formulates itself at the same time as to the timing of a rate increase is near. The short-term risks in the economy are "roughly balanced", according to the Fed.
At a press conference half an hour after the news developed Janet Yellen the Fed’s reasoning about the labour market.
– the Level of unemployment has remained flat. And many only get part-time jobs though they want to work full-time. But many who have not sought jobs in the past at the same time begin to get a job. It is very welcome, ” said Yellen.
– As the jobs market strengthens further we expect inflation to increase towards the 2% target in two to three years, said Fedchefen also.
Fedchefen now says straight out to "a rate hike is near". But, she continues:
” Our decision (not to raise now, ed) does not reflect a lack of confidence in the economy. But with the improvement in the labour market at a slower level than in the past we would still like to wait for more signs that it is going in the right direction.
A majority of surveyed in a reuters poll predicted before the evening’s interest rate announcement, that an increase will not occur until the fourth quarter. Expected it to end up in a range of 0.50–0.75 per cent.
Single observers and even parts of the fixed income market believe, however, that an increase may be delayed until next year.
the Last time the Fed raised the key rate was in december of 2015. It was the first increase in ten years, and the interest rate increased from 0-0,25 percent to the current range of 0.25–0.50 percent.
In the context of the increase sketched the Fed up a scenario with four interest rate hikes in 2016. But they have, as a result of weak inflation in the united states, the british folkomröstningsbeslut to leave the EU, and the slowdown in the US has been delayed.
The two remaining räntemöten is planned for early november and mid-december.
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