2018-06-08 13:35:00 Fri ET
federal reserve monetary policy treasury dollar employment inflation interest rate exchange rate macrofinance recession systemic risk economic growth central bank fomc greenback forward guidance euro capital global financial cycle credit cycle yield curve
The Federal Reserve delivers a second interest rate hike to 1.75%-2% and then expects subsequent rate increases in September and December 2018 to dampen inflationary pressures. This decision reflects robust economic revival in America. With sound price stability, the U.S. economy now operates near full employment with 2.1% inflation and 3.8% unemployment (i.e. the lowest unemployment rate since 2000). The current real economic growth trajectory accords with the Federal Reserve's dual mandate of maximum employment and price stability.
The Federal Reserve pencils in subsequent interest rate hikes later in 2018 (2%-2.25% in September 2018 and then 2.25%-2.5% in December 2018). This gradual acceleration of interest rate increases helps contain inflation with steady gains in the labor market. The current interest rate hike might disappoint President Trump who would otherwise prefer dovish monetary policy accommodation (in contrast to hawkish inflation containment).
However, the Federal Reserve reiterates monetary policy independence and thus continues the current interest rate hike as the U.S. economy moves along the long-run steady-state economic growth path of healthy fundamental recalibration. On balance, it is now quite plausible for America to achieve 3%+ real GDP economic growth to better balance the U.S. fiscal budget that helps neutralize both trade and budget deficits in the medium term.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2017-11-27 07:39:00 Monday ET
Is it anti-competitive and illegal for passive indexers and mutual funds to place large stock bets in specific industries with high market concentration? Ha
2023-12-08 08:28:00 Friday ET
Tax policy pluralism for addressing special interests Economists often praise as pluralism the interplay of special interest groups in public policy. In
2023-10-28 12:29:00 Saturday ET
Paul Morland suggests that demographic changes lead to modern economic growth in the current world. Paul Morland (2019) The human tide: how
2019-03-25 17:30:00 Monday ET
America seeks to advance the global energy dominance agenda by toppling Saudi Arabia as the top oil exporter by 2024. The International Energy Agency (IEA)
2019-09-19 15:30:00 Thursday ET
U.S. yield curve inversion can be a sign but not a root cause of the next economic recession. Treasury yield curve inversion helps predict each of the U.S.
2018-06-17 10:35:00 Sunday ET
In the past decades, capital market liberalization and globalization have combined to connect global financial markets to allow an ocean of money to flow th