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Principale » Trump budget chief sees Fed continuing accommodative rate policy

Trump budget chief sees Fed continuing accommodative rate policy

26 Juin 2017

The central bank delivered on that score, along with raising interest rates by 25 basis points as expected.

"In view of realized and expected labor market conditions and inflation, the (Federal Open Market) Committee made a decision to raise the target range for the federal funds rate to 1 to 1.25 percent", said the Fed in a statement after concluding its two-day monetary policy meeting. It's the third increase in rates by the Fed since December of 2016.

The interesting point of announcing this carefully constructed plan now is that, should Yellen's four-year term that ends on February 3, 2018 not be renewed, then the next Fed Chair will struggle against the constrains of the program and find it hard to change the plan.

The Fed said it will have a balance sheet "below that seen in recent years but larger than before the financial crisis" because banks need for higher reserves at the Fed.

Yes, it looks like Yellen has set in place a tightening strategy for quantitative policy that will likely endure. For more information about the Fed's balance sheet, please read Inside the Fed's Balance Sheet (The Biggest in the World).

After having gained strong support after the weak U.S. data, gold hit resistance close to $1,280 and fell sharply to lows below $1,260.

Joseph Gagnon, senior fellow at the Peterson Institute for International Economics and former visiting associate director of the Division of Monetary Affairs at the US Federal Reserve Board, told Radio Sputnik that rates will remain relatively low for some time despite the rate hike.

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They explained that one sibling had been against sending him to Caressant Care, because it seemed like a "substandard" facility. She said she became depressed and lost her job after his death, and that his absence has left a "void" in her life.

However, it could be that it will provide easier financial conditions and thus more scope for hikes.

The Federal Reserve is expected to announce plans to lift a key interest rate at 2 p.m.

The surprise helped to strengthen the dollar at the expense of the euro.

The 10-year Treasury note TMUBMUSD10Y, +1.39% ticked up 1.1 basis point to 2.149% point, compared with 2.138% late Wednesday in NY, which marked the lowest yield for the benchmark note since November 10. The yield on the 10-year Treasury note was 2.12 percent, the same as shortly before the statement came out.

Those factors mean the Fed's preferred inflation measure will remain below the 2 percent target for some time, but will gradually rise to the target level over "the medium term".

"The median projection for growth of inflation-adjusted gross domestic product (or real GDP) is 2.2 percent this year and edges down to 1.9 percent by 2019, slightly above its estimated longer-run rate".

Under this scenario, also high-yielding currencies (Emerging Markets or EM currencies) are also prone for depreciating against the dollar (G-10 FX carry index).

Trump budget chief sees Fed continuing accommodative rate policy