t’s too soon for the Federal Reserve to begin thinking about raising interest rates despite a strengthening U.S. economy, Dallas Fed President Richard Fisher said on Sunday. Mr. Fisher, a self-described inflation hawk who opposed the central bank’s latest round of bond purchases, said the weakness in first quarter U.S. economic growth, which nearly stalled … Continue reading
Interest rates will stay low to support economies and jobs, European Central Bank Governing Council member Ewald Nowotny told a newspaper, dismissing complaints that low rates were hurting savers. “Given the economic situation, the level of interest rates will remain low because it is in the overall economic interests to have this support for growth … Continue reading
UK – MARK Carney, the new governer of the Bank of England, today vowed to keep the interest rate at 0.5 per cent until at least the end of 2016 unless inflation rises sharply Continue reading
When will the unemployment rate fall to 6.5% (the Fed’s threshold, but not trigger, for raising the Fed’s funds rate)? If the participation rate stays steady, the unemployment rate will fall to 6.5% in December 2014 if the economy adds around 185,000 jobs per month. This is consistent with the Fed not raising rates until 2015 … Continue reading
The Federal Reserve’s is expected to extend its easing measures until the job market improves “substantially”, the stated goal is a decline of the unemployment rate to 6.5%. One can use the unemployment rate model to provide an estimate of the future unemployment rate (UER). This model suggests that the unemployment rate will decline to … Continue reading
The Federal Reserve set the target range for the federal funds rate at 0 to 25 basis points in December 2008. It has remained there because the recovery in output and jobs has been so slow. The rate was set so low to stimulate aggregate demand and job growth (by lowering borrowing costs for consumers … Continue reading