Wednesday, April 29, 2015

The “temporary” weakness raises uncertainty about rising … – Yahoo Finance Spain

Washington, April 29 (EFE) .- The economic weakness beginning of the year in the US, the Federal Reserve (Fed) blames “temporary factors” has increased uncertainty about the date for the expected rise in interest rates in the United States before the end of 2015.

At the conclusion of the two-day meeting of the Federal Open Market Committee (FOMC, for its acronym in English), the US central bank today reiterated his confidence in the strength of the economic recovery.

“Economic growth slowed down during the winter months, in part reflecting temporary factors” said the Fed statement.

It also recognized that the pace of job creation has been “moderate”, adding that “underuse of labor resources has hardly changed.”

The agency led by Janet Yellen is immersed in a process of normalization after billionaire monetary stimulus program and liquidity launched to revitalize the economy after the acute crisis of 2008.

After end bond buying program the past, the Fed has announced its intention to consider the rise in benchmark interest rates, which are currently between 0% and 0.25% in mid-year.

Last month alone, the forecasts for this rise were at the Fed meeting June or September.

However, the latest economic data, with job creation in 2015 so far below that recorded in 2014 and low inflation, has supported the possibility of a delay of this hike later.

Although the unemployment rate is in the 5.5%, the lowest level since 2008, the average monthly job creation is below the 200,000 jobs in the first three months of the year.

The Fed assessment coincided with the US release of the first estimate of growth of GDP in the first quarter, surprised to be negligible, standing at an annual rate of 0.2% figure.

This is the slower growth in over a year.

Among the “transitory” causes include falling oil prices, nearly 50% in one year, and the strong appreciation of the dollar against currencies as the euro or the yen, about 15%.

In fact, the central bank statement refers to “imports of non-energy products” were keeping inflation below 2% annually , referring to the impact of the strong dollar.

“Inflation is expected to remain near its recent low level in the short term, but the committee expected to gradually grow to the 2% target in the medium term “the Fed said.

The markets were somewhat more cautious than the Fed. Wall Street ended lower and the Dow Jones Industrial Average, its main indicator, yielded 0.41%, dragged down by the weak GDP growth data.

In a note to clients, the financial firm IHS Global Insight rejected the Fed little ingenuity.

“The authorities fully understand that although much of the slowdown of the first quarter was related to climate, growth and inflation still face headwinds related to the strong dollar, low oil prices, the external weakness and the ongoing deleveraging of households, “he said.

The next FOMC meeting is scheduled for 16 and 17 June, the date on which the Fed will update its economic projections and Yellen will offer a press conference

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