The challenge of timing the US interest rate hike
The fear is that the Federal Reserve could end up raising rates before the American economy is ready for a take-off
SINCE the statement issued after the meeting of the Federal Open Market Committee (FOMC) in March, the message from the policymakers at the US central bank in Washington has been clear.
"The committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labour market and is reasonably confident that inflation will move back to its 2 per cent objective over the medium term."
The message was that the Fed (which has not raised interest rates in more than nine years and had been keeping its key funds rate near zero since late 2008) was now ready to consider increasing interest rates if and when there were clear signs that the unemployment rate was going down - and the inflation rate going up.
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