Money and business

American interest rates .. political temptation is fraught with economic risks


Global markets are awaiting an advertisement The Central Bank expected tomorrow, Wednesday, regarding interest rates, while the monetary policy makers are an arduous task of reassuring markets and consumers, without raising panic or prejudice to their credibility as the largest financial institution in the world. "Wall Street" It is a quarter of the interest rate by a quarter of a percentage point (25 basis points), but the real impact may not lie in the number of basic points, but in the words that the Federal Reserve Chairman, Jerome Powell, will use to draw the future path of monetary policy." target ="_Blank"> The American inflation is fixed at 2.9%, and the growth indicators are declining, while the returns of bonds and credit differences indicate that investors are ready for at least a slight facilitation, but not for a fundamental change in monetary policy. "Haider Business College" At Creton University: "The federal reserve policy has been very cautious over the past few years, whether in raising prices The benefit or reduce it, and I think this philosophy will continue"
added: "The Federal Reserve will move from focusing on curbing inflation to focusing on encouraging economic growth and reviving the recruitment market, and the last weak data has accelerated this change in its focus"

Analysts warn of the financial deficit < /h2>
analysts warn that reducing interest rates cannot erase the financial deficit, or the incompatibility between supply and demand in the treasury bond market, or the term bonuses (compensation that investors need to withstand the risk of changing interest rates over the age of the bond) that continue to pay long -term returns to rise. /> Charles Orkastrt, assistant professor in financial development, says that "A slight reduction in interest rates would reduce some burden, especially for the sensitive sectors of interest rates such as the housing sector. But long -term returns are likely to remain high until more clear signs of weakness appear"

No dramatic transformations. As long -term interest rates continue to rise, capital markets are still suffering from twice. Customs duties or other political procedures may easily reinforce inflationary pressure, forcing the Federal Reserve to be careful when resorting to reducing interest. "Inflation is still fixed in the service sector, and customs duties may renew the pressure on goods. This makes the sharp reduction as an alternate political, but it is fraught with the economy"

What will happen in the future?" target ="_Blank"> The central bank in a complete cash facilitation course. Any reduction than that may raise questions about whether the Federal Reserve sees risks that investors do not see.

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