The members of the Fed’s FOMC left the key interest rate unchanged at 0,25%-0,5% during the latest meeting last week. This is confirmed by the FOMC meeting minutes. To be more specific, the minutes read that the information received since the March meeting clearly indicates that the contemporary labor market is definitely improving and recovering despite the likelihood of another economic slowdown in the USA.
The FOMC thinks so due to the fact that the contemporary household spending slowed down over the reporting period even though the real household income keeps on growing steadily and continuously, Market Leader reports. That’s why consumers feel confident and positive over the near-term economic prospects, Masterforex-V Academy experts say.
At the same time, Masterforex-V Academy experts also report that the Federal Reserve is currently seeing several contradicting tendencies. For instance, the entire U.S. housing sector has improved a lot since the start of 2016. However, the dynamics of corporate investments in fixed capital and net export has been pretty weak.
At the same time, the latest indicators, including a pretty fast increase in the amount of new jobs indicates extra strength in the current labor market. As for the inflation rate, it is still well below the 2% target set by the Federal Reserve. This is partially due to lower energy prices, with oil being the biggest reason for that.
At the same time the FOMC reports that the money-and-credit policy is going to retain its accommodative nature, thereby promoting and backing the local labor market and hitting the 2% inflation target in a more distant future.
As for the interest rate decision made by the FOMC, it was made almost unanimously, with only one member voting for another interest rate hike. As for Janet Yellen, she says that the Fed is going to be very cautious when it comes to interest rate hikes since the economic slowdown in China and the bearish tendency seen in the oil market put the global economic growth in jeopardy, which is something all of us should void at all costs. That’s why the Fed is not in a hurry to implement another interest rate hike.
