US and Fed raise interest rates in December … 3 uncertain forecasts next year – Chosun.com

Entry 2018.11.30 13:21

The US Federal Reserve predicted a possible rate hike in December. As for monetary policy next year, it responds flexibly to economic conditions.

According to the November FOMC minutes released on December 29, most Fed members "will justify further rate hikes in the near future," he said. "This decision is consistent with our belief that policy normalization is gradual." He said.

The Wall Street Journal (WSJ), CNBC and others have not specifically commented on the timing of the Fed, but are considering it as a reminder for the December rate hike. If the Fed raises interest rates next month, it will increase the fourth rate this year.

The committee said they should discuss factors that could cause the economic downturn while discussing further rate hikes. Risk factors included high tariffs due to trade disputes between the United States and China, trade policy uncertainties, corporate debt, declining global demand, increased production costs and high interest rates. Increasing the rates that companies pay can result in higher costs for consumers, which can lead to inflation (constant inflation). In addition, members predicted that the mortgage rate was rising and that the housing market was weakening and hampering economic growth.

However, the changing economic conditions of the Fed has highlighted the possibility of a change in the direction of monetary policy. "Monetary policy has not been defined in advance, so if the information received significantly re-evaluates the outlook and the economic risks, the outlook for Fed policy will change." The Fed said the outlook for the three rate hikes next year was uncertain, according to WSJ.

I have focused on the latest indicators. "The policy statement should put more emphasis on the badessment of the most recent indicators to badess future economic and political prospects," he said, "which will help to translate the policy into reality." flexible approach of the Fed in the face of the changing economic environment ". . It was also discussed the opportunity to revise the statement that "the additional fee increase is appropriate", which has always been included in the statement.

Some commissioners have stated that the benchmark interest rate is approaching the level of "neutral interest rate". Neutral interest rates represent the ideal rate at which economic growth can take place without inflation or deflationary pressures. If the interest rate reaches the neutral rate, it is not necessary to raise the additional rate.