FOMC Minutes Exhibit More Patience

Officials at the Federal Reserve are unlikely to raise interest rates soon, the latest minutes from the bank’s January meeting have revealed.

Policymakers worried about lower-than-expected inflation as well as slow wage growth in the US economy, the world’s largest.

The Fed has kept its benchmark interest rate at zero since late 2008, when it slashed rates to boost the economy.

Most observers do not expect a rate rise before this summer.

“Many participants indicated that their assessment of the balance of risks associated with the timing of the beginning of policy normalization had inclined them toward keeping [rates at zero] for a longer time,” the minutes said.

Although the US economy has been growing at a healthy rate, sluggish growth abroad combined with slower-than-expected wage increases have made policymakers wary of raising rates and unnecessarily stifling economic growth.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza