Federal Reserve officials urge caution on rate rises

Cornelia Mascio
Gennaio 10, 2019

Investors will be looking for new clues on US interest rate policy when Federal Reserve Chairman Jerome Powell speaks before the Economic Club of Washington on Thursday afternoon.

The Federal Reserve is one of the most important institutions in global finance because it influences the cost of debt worldwide by raising or lowering its base interest rate. The Fed cut the rate to nearly zero during the financial crisis but has since raised it to a "neutral" level, meant to neither stimulate nor constrain the economy.

As inflation shows no signs of accelerating much beyond the Fed's two per cent target, there is no urgent need to raise the benchmark lending rate further, he said.

The Fed last increased its base rate in December, the fourth... Since then, stock markets endured a topsy-turvy end to the year as the USA government shut down and global trade tensions ratcheted higher.

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