The Fed’s next step
Latest News »
- Airtel Payments Bank taking lead in launching UPI-based payment service
- Treat us with respect: Pakistan Army chief Gen Qamar Javed Bajwa to US
- Former CIA agent wants to buy Twitter to kick Donald Trump off
- Narendra Modi to visit Gujarat on 17 Sept to inaugurate Narmada Dam
- Congress says not to ally with NCP for Gujarat assembly polls
The US Federal Reserve’s latest assessment has opened up the possibility of another rate hike. It says near-term risks have declined and US economic activity is expanding at a moderate pace. Some market participants now believe that the second rate hike in nearly a decade could come as early as September. The Fed will perhaps be better placed to move forward on the policy normalization path in September as political developments due to the impending US presidential election later in the year and its impact on financial markets could complicate policy choices.
It will also be closely watching other central banks and developments in international markets. Japanese Prime Minister Shinzo Abe has announced a new fiscal stimulus package and has effectively put the onus on the Bank of Japan (BoJ), which will end its two-day meeting on Friday, to do more to support economic activity and prices. Policymakers and markets would be keenly watching BoJ’s decision.