Wednesday, August 19, 2015

The Fed sees more conditions to raise rates – FORTUNE

MEXICO CITY (CNNExpansión) – The members of the Federal Reserve considered that the conditions to raise interest rates are closer, but expressed concern about the low inflation.

“Some participants stressed that the economy has made significant progress in recent years and saw that economic conditions to start increasing interest rates already achieved or are achieved,” reads the minutes of the policy meeting the central bank held on 28 and 29 July, when he decided to keep rates at near zero levels.

However, some participants expressed doubts about the possibility that inflation will approach the target of 2% of the Central Bank.

“Some members expressed the view that the information so far has not given confidence that inflation will move to the 2% target in the medium term,” says the document.

“Almost all members indicated they would need to see more evidence that economic growth is strong enough and the conditions of the labor market strong enough to be confident that inflation will reach the target in the medium term”, added.

The US labor market has shown strength in recent months: in July were created 215,000 jobs. Therefore, analysts believe that the Fed will raise interest rates at its meeting in September for the first time since 2006.

However, inflation continues to generate concern. The preferred measure by the Fed to prices rose only 0.3% in June from the same month in 2014.

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