14 September, AtoZForex.com, Lagos – The oracle of Omaha has spoken again, and this time it is about the impending rate hikes among other things. Speaking to CNBC, he pointed that the U.S. economy is growing at about 2 percent, a rate he characterized as not bad.
“We’re still on that path we’ve been on for six years,” the chairman and CEO of Berkshire Hathaway said. “That’s not a bad rate, but it’s not a booming rate, either.”
Warren Buffet on rate hikes
This week, the US Federal Open Market Committee meets. Investors around the world will be watching keenly as it remains unclear whether or not rates will be raised in this meeting, considering the recent volatility in financial markets.
Further commenting about the impending rate hike, Warren Buffet said: “If our rates got substantially higher than Europe’s, I don’t think that would be good for exports in this country,”. “In economics, you can never do one thing. There is always a ‘then what’ and I think the ‘then what’ of raising rates while Europe’s trying to keep them low could have some consequences down the line.”
The majority is against September rate hikes
Both the IMF and the world bank have advised the US central bank against raising rates too soon. According to the world bank chief economist, Kaushik Basu, the federal reserve risk triggering “panic and turmoil” in emerging markets if it decides to commence the much anticipated US rate hikes at its September meeting.
He advised that the central bank to wait until the global economy looks firmer, before commencing. Considering the rising uncertainty over growth in China and its impact on the global economy. A Fed decision to raise its policy rate next week, for the first time since 2006, would have negative consequences, Kaushik Basu told the Financial Times.
The International Monetary Fund in its statement on the annual assessment of the economy also prescribed that the U.S. Federal Reserve should hold its rate hikes till the first half of 2016. The primary reason for this advice is that the timeframe gives enough room to monitor signs of a pickup in wages and inflation.
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