Monday, November 19, 2018 – 5:50
Federal Reserve policy makers announced a further increase in interest rates on Friday, even if they raised relatively worrisome concerns about the potential global downturn in which markets are largely in favor of rates so that momentum continues to increase.
With the difference between market expectations and the interest rate path that the Fed had just expressed two months ago, the biggest issue facing the US central bankers is highlighted: the importance of getting more and more potential red flag, even if the US economy growth will continue to reduce unemployment and create jobs? "At the moment, we have everything from which we really need to be particularly dependent on data," said CNBC interview Richard Clarida, Fed's newly created vice president.
"I think that, of course, where is the economy today, and the Fed's forecasts of where it is going to be neutral, it makes sense," he added, setting a "neutral" as a policy rate of about 2.5 percent to 3 , 5 percent.
Such a range means something from two to six raised rates, and Mr Clarida denied saying how much he would like. He said he was optimistic that US productivity is rising and believes he will not see a sharp increase in economic or wage gains as it always leads to higher inflation or more stringent policies. But he also made a mild warning.
"There is some evidence of a global slowdown," said Mr Clarida.
"This is something that will be significant, because I think about the prospects of the US economy because it affects a large part of the economy through trading and capital markets and the like."
The president of the Dallas Federal Reserve, Robert Kaplan, said in a separate interview with Fox Business that growth in Europe and China were slowed down.
"I myself am convinced that global growth will be a bit loose and can be transferred to the United States," said Mr Kaplan.
The fund raised interest rates three times this year, and will increase from 2.25 percent to 2.5 percent next month. Starting from September, Fed policy makers should raise their rates three times in the coming year, and the view will be updated next month.
Last week's betting deals involving federal government policies suggest that even two-rate increases could be a milestone. REUTERS