2 June, AtoZForex, Vilnius — Lately, the Federal Reserve (Fed) Chairwoman Janet Yellen has been dovish in regards to the U.S. economy. The interest rates were kept low, which in turn was stimulating the growth of the U.S. market. Currently, Yellen is about to announce the semiannual monetary policy report to the Senate Banking Committee on 21st of June, 2016, as reported by the panel.
The Central Bank’s beige book – the report on regional economic conditions, or as it called more officially the Summary of Commentary on Current Economic Conditions has been published yesterday. Fed Beige book reports that the “tight labor markets were widely noted in most districts.”
Beige book: Job market is tight across the States
The beige book summarizes the anecdotal information gathered by each of the Federal Reserve Banks across the States through interviews with main business contacts, economists, market experts, and other sources.
As Fed Beige book reports, the job market is tightening throughout the whole country, which leads to increased wages for many of the workers. As it appears in the beige book, the wage growth and employment are described as moderate, with wages boosts “concentrated in areas of labor tightness.”
In the Cleveland district “higher construction prices to cover rising worker costs resulting from tight labor markets” were reported. Companies located in Atlanta and Richmond districts reported that that “high-skill workers in high-demand fields continued to be hard to find, and low-skill jobs were also becoming harder to fill.”
The ‘soft labor markets’ were reported over the energy sectors in the Cleveland, Minneapolis, Atlanta, Dallas, and Kansas City districts. The report said:
“Several districts noted that contacts had generally optimistic outlooks, with firms expecting growth either to continue at its current pace or to increase.”
Is Fed planning on short-term interest raise?
Authorities indicated that if they see the good stable trend in the U.S. economy, the country can expect a short-term interest rates hike on June 14-15, when the gathering is going to take place or later, on July 26-27, during the next Fed meeting.
Janet Yellen commented on this matter:
“probably in the coming months, such a move would be appropriate.”
The Fed Chairwoman stated that the rate hike decision is totally dependent on how the situation in the U.S. economy is going to develop. The Fed was keeping its federal-funds rate near zero until December when it went up to the range of 0.25% to 0.5%. A majority of Fed authorities had anticipated another two quarter-percentage-point rate raises by the end of 2016.
You can find further information on the Fed Beige book in the official Fed website.
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