Federal Reserve- Interest rate hike probability

2015 in the U.S calendar is majorly geared towards interest rates deliberation by the Federal Reserve which has strong reasons of experiencing a hike by the mid-year.

It is to be noted that the Fed did not alter interest rates for nearly six years and has maintained its level to zero for this time-span.

Economists are on their part are expecting the inflation report to show sparks with the fall in oil prices.

This year, the U.S will see itself with a strong dollar on hand but with a global economy that will be quite stagnant and assets such as oil will greatly affect market goods.

The Federal Reserve will likely going to consider the labor market in 2015 due to previous discrepancies noted and this might engender a rise in wages.

The labor market changes is one of the greatest factor that will push the Fed to re-consider interest rates as the variations will directly impact the services sector.

Barclays forecasts for 2015 projects that Consumption Expenditure will be up to 0.5 % for the second quarter of 2015 while Core Prices will rise by 1.7%.

From the Federal Reserve’s part, they will have to be very pragmatic when raising interest rates and promote two-way communication on all levels.

Fed’s chair Janet Yellen has previously stated that they are “monitoring inflation developments carefully” in order to use it as a benchmark for interest rates hike.

Source: Bloomberg

Priscilla Camryn By: Priscilla Camryn
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