U.S. Federal Reserve is "not remotely close" to needing to consider negative interest rates
Feb 18, 2016 02:38GMT
Last night at St. Louis, Fed President James Bullard said that the U.S. Federal Reserve is "not remotely close" to needing to consider negative interest rates and despite rising global risks, the U.S. economic outlook remains reasonably strong. There is not a need of the negative rates being used in Europe and Japan to try to encourage growth.
Even as Bullard suggested Fed rate hikes may proceed more slowly than expected, US are just not in the situation sitting here today where we would be thinking about those kinds of moves.
More on his comments, Bullard stressed that there is no advantage in choosing a higher inflation target, with the too-big-to-fail banks that remain an issue, there is a "long way to go" to fix these problems. The effort to curb this too big to fail should focus on ways to limit leverage.
Bullard continued to suggest that it is 'unwise' to continue hiking rates amid falling inflation expectations. The recent decline in equity and corporate bond markets decreases risk of asset bubbles, giving Fed 'more leeway' in its rate hike decisions. With the drop in inflation outlook and financial volatility that have undercut some of the core assumptions around which Fed's December rate hike was based.
The quarterly interest rate path projections of Fed officials may be counter productive, giving markets the sense that rates are on a set path rather than data dependent.
He expects U.S. and global growth to strengthen in 2016, with lower longer-term interest rates providing a boost.
http://www.acetraderfx.com
AceTrader has been in FX market since 1984, with proven analytical approach used by professionals and real-time updates
Feb 18, 2016 02:38GMT
Last night at St. Louis, Fed President James Bullard said that the U.S. Federal Reserve is "not remotely close" to needing to consider negative interest rates and despite rising global risks, the U.S. economic outlook remains reasonably strong. There is not a need of the negative rates being used in Europe and Japan to try to encourage growth.
Even as Bullard suggested Fed rate hikes may proceed more slowly than expected, US are just not in the situation sitting here today where we would be thinking about those kinds of moves.
More on his comments, Bullard stressed that there is no advantage in choosing a higher inflation target, with the too-big-to-fail banks that remain an issue, there is a "long way to go" to fix these problems. The effort to curb this too big to fail should focus on ways to limit leverage.
Bullard continued to suggest that it is 'unwise' to continue hiking rates amid falling inflation expectations. The recent decline in equity and corporate bond markets decreases risk of asset bubbles, giving Fed 'more leeway' in its rate hike decisions. With the drop in inflation outlook and financial volatility that have undercut some of the core assumptions around which Fed's December rate hike was based.
The quarterly interest rate path projections of Fed officials may be counter productive, giving markets the sense that rates are on a set path rather than data dependent.
He expects U.S. and global growth to strengthen in 2016, with lower longer-term interest rates providing a boost.
http://www.acetraderfx.com
AceTrader has been in FX market since 1984, with proven analytical approach used by professionals and real-time updates
Trendsetter does not warrant or guarantee the accuracy, timeliness or completeness to its service or information contained therein. Trendsetter does not give, whatsoever, warranties, expressed or implied, to the results to be obtained by using its services or information it provided. Users are trading on their own risk and Trendsetter shall not be responsible under any circumstances for the consequences of such activities. Trendsetter and its affiliates, in no event, be liable to users or any third parties for any consequential damages, however arising, including but not limited to damages caused by negligence whether such damages were foreseen or unforeseen.
Recommended Content
Editors’ Picks
AUD/USD turns south toward 0.6400 after mixed Australian jobs data
AUD/USD has come under renewed selling pressure and turned south toward 0.6400 after Australian employment data pointed to loosening labor market conditions, fanning RBA rate cut expectations and weighing on the Aussie Dollar.
EUR/USD holds above 1.0650 amid renewed selling pressure in US Dollar
The EUR/USD pair edges higher to 1.0672 on Thursday during the early Asian session. The recovery of that major pair is bolstered by renewed selling pressure in the US Dollar and a risk-friendly environment.
Gold retreats as lower US yields offset the impact of hawkish Powell speech
Gold prices retreated from close to weekly highs during the North American session on Wednesday amid an improvement in risk appetite. The bullish impulse arrived despite hawkish commentary by US Federal Reserve officials.
OMNI post nearly 50% loss after airdrop and exchange listing
Omni network lost nearly 50% of its value on Wednesday after investors dumped the token following its listing on top crypto exchanges. A potential reason for the crash may be due to the wider crypto market slump.
US stock continue to stumble as traders rethink rates
US stocks grappled with uncertainty on Wednesday in the wake of a cautious string of commentary from the US Federal Reserve officials. The S&P 500 is currently experiencing its longest non-bullish streak in months.