According to Janet Yellen, the former head of the Federal Reserve System (FRS) of the USA, the regulator can go on lowering the interest rate in the future if the weakening of economic growth all over the world affects the American economy.
She believes that the weakening of global economic growth will affect the United States. To normalize the situation, the Fed may reduce the interest rate. She believes the slowdown in global growth is the most significant threat to the US economy. "At present, US economic data is stable and strong, although experts have long predicted a slowdown in 2019, which could be about 3% or higher," the former Fed chief believes.
Recall that following the meeting on December 18-19, 2018, the Fed raised the interest rate on federal funds by 25 basis points, to 2.25% -2.50%. Representatives of the regulator also predicted two rate hikes in the current year. At the January meeting, the Fed leadership kept interest rates at the same level, analysts say.
According to J. Yellen, this forecast is quite justified, and the two rate hikes in 2019 are quite reasonable, despite the uncertainty regarding future prospects.
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