Forex Blog: Currency Trading News & Analysis.

October 26th 2006

Will the Fed raise rates any further?

Speculation over whether the Federal Reserve Bank (Fed) would raise interest rates at its monthly policy meeting reached fever-pitch this week, culminating in the Fed’s announcement yesterday to leave rates unchanged. Analysts reckon the calculus of factors that weigh on Fed interest rate decisions is more complex now than ever before. The Fed must not only contend with high inflation, stubborn unemployment, and the need for economic growth, but also asset prices and the balance of trade. Everyone agrees that core inflation, at 3%, is higher than it should be. However, Ben Bernanke, chairman of the Fed, clearly realizes that while a rate hike would certainly stem inflation and limit the possibility of asset bubbles forming, it would also dampen the economic growth which has become so critical to America.

Read More: Why Fed Might Keep Rates on Hold

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© 2004 - 2024 Forex Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.