He later told reporters there hadn’t been any economic data since that meeting that had changed his view that the Fed should raise rates by half a percentage point this year.
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The first quarter of 2015 was a forgettable one for the US economy, as winter weather buried much of the Northeast and Midwest, a strong dollar generated unfavorable exchange rates for US exports and a West Coast port dispute handicapped trade.
The minutes also showed worries about the pace of China’s economic growth.
It highlighted progress in various sectors, including manufacturing and housing.
Some analysts said the recent Greece and China developments lowered the chances of the Fed raising rates in September. “”They want to wait and see how things develop”, said Sung Won Sohn, an economics professor at the * a href=”http://www.memphisdailynews.com/Search/Search.aspx?redir=1&fn=Martin&ln=School” class=”learn” rel=”.
Name SearchWatch Service’>Martin Smith School of Business at California State University, Channel Islands. He described the gyrations in the Chinese stock market including a sharp recent sell-off as an added dimension to risks that were already present. Because all have borrowed trillions of dollars in the last few years, they will now face an increase in the real local-currency value of these debts, while rising U.S. rates will push emerging markets’ domestic interest rates higher, thus increasing debt-service costs further.
“I think the earliest window for a Fed rate increase will be December”, said Mr Brian Bethune, an economics professor at Fisk University in Boston.
Some investors are betting worldwide turmoil, including the possibility of a Greek exit from the euro, could be a reason for the Fed to put off a rate increase this year.
Chinese stocks stabilised after the securities regulator banned shareholders with stakes of more than 5 per cent from selling shares for the next six months in a bid to halt a plunge in stock prices that is starting to roil global financial markets.
Closer to home, he said he does not expect markets to respond in a “strange or unpredictable” way when the Fed does begin to raise rates, and guessing about the market’s likely reaction is not what is driving the Fed’s policy decisions.
“Right now, we see inflation indicators actually declining in the USA”, said Nigel Chalk, the IMF’s USA mission chief.
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George is among a handful of influential inflation hawks – Dallas Fed Chair Richard Fisher is another – who believe historically low interest rates will eventually lead to unsafe asset bubbles and runaway inflation. In addition, she will deliver the Fed’s mid-year outlook on the economy during two days of testimony next week before House and Senate committees.
