FED Will Not Make Interest Changes

FED Will Not Make Interest Changes

The expectation that the FED will not change interest was expressed by analysts. According to economists, the FED (US Central Bank) will not make any changes in interest and asset purchase, but will be able to voice some changes and explain the inflation strategy. Speaking to AA correspondent, Commerzbank US Fed Economist Bernd Weidensteiner reported that the FED was intensely discussing updating the verbal guidance. Stating that the lowering of interest rates can be spoken for a longer period of time, Weidensteiner stated that FED President Jerome Powell could give a little information about the subject at the meeting. Saying that the FED is too early to make an official change, Weidensteiner said, “The Fed now believes that monetary policy was tightened early after the 2007-2009 crisis. In this period, the bank relied on a model that predicted that inflationary pressures would emerge after strong labor market performance. '' Stating that this prediction is not correct, Weidensteiner said, "Now it seems that the Federal Open Market Committee (FOMC) wants to wait until the rising price pressures are reflected in the inflation figures." Emphasizing that it is not yet certain that the FED will put into practice a new policy approach by making a change of expression in the said meeting, Weidensteiner stated that Powell can make implications about the subject; therefore, he said that market participants will listen to Powell carefully. In addition, Weidensteiner reported at this meeting of the FED that it would not make any changes to the interest and asset purchase program.

'May Allow Inflation To Rise Above 2 Percent'

Berenberg USA, America, Asia Chief Economist Mickey Levy stated that the FED will emphasize the uncertainties in the economic outlook and announced that the bank can support the economy with more aggressive monetary policies. Stating that the FED could explain the inflation strategy and announce the long-term average inflation target as 2 percent, Levy suggested that the bank would allow inflation to exceed 2 percent.