It is finally confirmed. The Federal Reserve won’t be raising interest rate by the end of this week as economy was vulnerable in the first quarter. Healthy job market, increased wages and higher consumer spending made many experts think that central bank would be taking the most anticipated decision but looks like they are playing it safe. The bank informed at policy meeting that investors should expect rate hike by the end of current financial year.
Decision makers feel that economy has been doing well after the policy meeting of April, according to the statement released by Federal Open Market Committee. The labor market has been leading factor for the increased confidence. The individual policy evaluations by policy makers will explain the trends further. The Federal Reserve has already cleared that it wishes to increase rate once for all. If the economy is doing too good then rate hike will happen twice. Kris Dawsey from Goldman Sachs informed that the indications from recent meeting are very important. If everything goes as per the plan the rates will be raise by September and again by the end of fiscal year. He works as an economist at the firm. The Chairwoman, Janet Yellen will address the press soon after policy statement and new economic projections are made public.
The forward guidance policy has been implemented since 2009 in order to regulate the economy till its recovery. The great recession forced the central bank to be committed to low interest rate for balanced markets.