Washington: persistent worries concerning the US Economy globally and the possibility of the exiting from the European Union by Brexit – Britain will probably be keeping the Federal Reserve on hold as it reviews the rate of the interest for the third time in the current year 2016.
The committee of the Policy-Setting Federal Open Market will also be purchasing time in order to be sure that the United States economy picks up right from a modest first-quarter slowdown and more weakness that are not expected in inflation. This is according to the analysts.
Some few minutes after the FOMC’s meeting and the speeches which were given by the Federal authorities clearly show that the group is divided between the individuals who think of another increase in the benchmark of federal funds rate after December’s should be appropriate at this moment and those who would like to wait.
According to the analysts, the very heavy hand of dovish Federal chair, Jannet Yellen along with Brexit, the Greek crisis which is still simmering in addition to the other worries concerning the international economy are expected to keep the balance against an increase.
Tuesday and Wednesday are the scheduled meeting days of the FOMC, this is the third meeting of the current year which had begun with the expectation of the four rate increase which is possible to take the Fed fund rate to 1.25-1.50 per cent by the end of the year.
At the begging of the year after the deep turbulence which was experienced in international financial markets, and then the weaknesses that exist in the United States consumer and the growth picture is clouded by the business investment, the expectation were put as low as to just one or two quarter point increase for this year.
Slower growth outlook
The meeting turned to be a debate both inside and outside the Fed concerning whether the United States economy is very well insulated to resist more volatility in global financial market and proceeding slow growth worldwide.