The Interest Rate Hike Could Come As Early As June
The investors’ uncertainty and the recent weak economic data may not be enough to stop the Federal Reserve from raising the United States interest rates in June. This claim, coming from the two very influential officials of the Federal Reserve, will significantly raise the importance of the economic performance date in the two months before June.
The expected interest rate hike has been delayed to the end of 2015, due to the discouraging jobs growth in the United States, low manufacturing activity and disappointing retail sales in the winter months. June is the earliest possible time for the Federal Reserve to tighten the policy and raise the interest rates from the near zero interest rates which have been used in the last six months.
William Dudley, the President of the New York Federal Reserve and Jerome Powell, the Fed Governor presented the possibility on Wednesday, that the United States’ central bank could beat the expectations and raise the interest rates earlier than predicted. William Dudley, a close associate of Janet Yellen, the Federal Reserve chair, said that he “Could imagine circumstances where a June rate hike could still be in play,” Reuters reported. “If the economy is strong, the unemployment rate is dropping, wages are rising, and the outlook is good, you could conceivably get to that point,” added Dudley, admitting that given the recent economic data, “the bar is probably a little bit higher” for an interest rate rise in June.
Just a slight interest rate hike in the economy of the United States of America would heavily affect the global financial markets. The first hike, which may even come in June, will have a deep psychological effect, after the economic crisis, but the predictions are that the rates will stay close to the all-time low levels for years to come.