After a two-day meeting of its Monetary Committee, the Fed says anticipate “a gradual rise in inflation to 2% over the medium term” and downgraded its forecasts growth for this year.
Janet Yellen confirmed Wednesday his intention to abandon the zero interest rate policy of the Federal Reserve by year end. Many even see the boss of the Fed begin normalizing monetary policy in the month of September. Following a two-day meeting of its Monetary Committee, the Fed says anticipate “a gradual rise in inflation to 2% over the medium term as the labor market continues to improve and that the effects Transitional past declines in energy prices and imports dissipate. ” The Committee anticipates that it will be appropriate to meet the objective of the “fed funds” when it has seen “further improvement in the labor market”. These words express the conviction Janet Yellen and his colleagues that the deflation risk disappears in the US.
After five and a half years director near zero, it will soon become necessary to return to a policy more normal, with an interest rate still very low, but positive. Nothing is planned yet, “The current conditions do not warrant a rate hike. The increase will depend on statistics that fall. We expect more convincing evidence that moderate growth will be sustained, “said Janet Yellen told a press conference.
According to the documents reflects the proceedings published by the Fed, 15 of the 17 members the Monetary Committee provide a first rate hike before the end of the year. Janet Yellen and his colleagues also revise down their growth forecasts for this year. They now expect an increase of 1.8 to 2%, even against 2.3 to 2.7% in March. The unexpected contraction in the US economy in the first quarter partly explains this revision.
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