Little leeway for Gulf economies in high interest scenario | GulfNews.com:
"The data on the Federal Reserve website tells that the US economy in 2017 had a better performance than 2016’s, registering a real growth rate of 2.3 per cent compared with 1.5 per cent and exceeding expectations. Moreover, the inflation rate moved to a more comfortable level, while unemployment declines reduced the tension inside the economy. A Survey of Professional Forecasters predicts the US economy will continue the performance because of several reasons, of which the continuous increase in government expenditures, the noticeable improvements in personal consumption expenditures, and the tax reform package announced in December are notable. These indicators — and others — have encouraged the Fed to continue rising the federal fund rate (FFR), which is the interest rate at which banks borrow and lend reserves to each other. In December 2015, the Fed started to raise the FFR and continued eight times between January 2016 to March 2018. In the same vein, the interest rate on the excess reserves witnessed a remarkable increase between November 2015 and March 2018."
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