No US Fed rate hike |
The Federal Reserve of the United States of America has signaled on March 18 that it needs to see further improvement in the job market and higher inflation before it raises interest rates from record lows. This might be good news for India because rake hike in the US could lead to a fall of the Rupee against the Dollar. But, the Fed left the door open to a rate increase later in the year. The Fed is no longer saying it will be patient in starting to raise its benchmark rate. The statement the Fed issued after its latest policy meeting appeared to catch investors by surprise in suggesting that a rate increase might be further off than many had assumed. Stock prices surged and bond yields fell in the US. On Wall Street, the Dow Jones industrial average, which had been down nearly 100 points before the statement was issued, was up more than 220 points an hour later. The Fed has kept its key short-term rate near zero since late 2008 to bolster the economy after a devastating financial crisis and recession. The Fed noted that the economy, which it previously said was growing solidly, has moderated somewhat.
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