On July 31st - August 1st, Washington is to host another FOMC meeting. For those of you who don't know FOMC is a Fed committee. The entire business and investment world is now looking forward to the result of this FOMC meeting. The key question is whether the Fed is going to keep on toughening its money-and-credit policy. The answer will be revealed later on Wednesday.
10 years ago, the global financial crisis forced the Fed into cutting the interest rates to unprecedented levels - 0-0,25%. This decision made it possible to spur consumption and increase investments. The monetary easing ended in late 2015 when the American economy got out of the recession. Back then, the Fed started gradually raising the rates. The latest (7th) interest rate hike took place last month, when the key interest rate was increased all the way up to 1,75%-2,0%.
Traditionally, the Fed raises the interest rates once a quarter. This way, the next interest rate may take place on September 26th. Tomorrow, the FOMC meeting minutes will hit at the Fed's intensions regarding the interest rate decision that will be made in September.
The interest rate hikes implemented by the Fed have been the reason why the U.S. Dollar has been strengthening so far, along with higher T-bond yields. Donald Trump has been criticizing these Fed policies while blaming the Fed for giving America's rivals a competitive edge though a stronger dollar. Will the Fed make concessions to the President?
