Fed December rate hike is becoming more of a reality every day, as the Fed officials, such as William Dudley, reiterate the chances of the raise. Will the US elections affect the Fed decision?
20 October, AtoZForex – The Federal Reserve (Fed) is expected to raise the interest rates until the end of the current year, in case the US economy will be growing steady, according to one of the Fed officials, New York Fed President, William Dudley.
Fed December rate hike is imminent?
Mr. Dudley has stated that the following at the Lotos Club this Wednesday:
“If the economy stays on its current trajectory I think … we’ll see an interest rate hike later this year.”
NY Fed President is currently has a permanent vote on policy while being on the close terms with Janet Yellen. Mr. Dudley has mentioned that 0.25 percent hike this year “is not really that big a deal” as the US economy stance is “reasonably close” to the set goals, such as 2 percent inflation and sustainable employment.
The central bank has decided not to change rates last month, even though a big number of analysts were predicting the rate hike. Currently, the experts and investors are expecting the Fed to implement the rate hike at their December meeting.
The timing won’t be an issue
William Dudley’s remarks only support this version, as he stated:
“We have made quite good progress toward our objectives … so clearly as we get closer to our objectives it’s likely that we’d want to make monetary policy somewhat less accommodative. That’s quite different than saying there is this urgency to tighten policy aggressively. I don’t see that urgency.”
While being asked about the potential risk to raise the rates in December, as the banks diminish the balance sheets for the end of the year and investment funds gradually reduce the bets, Mr. Dudley stated that he was “definitely not worried about the timing.” This answer he explained by saying that the raised rates from near zero last year in December went just fine.
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