Thursday 22 August 2019

Fed to raise rates as BoE holds steady

Federal Reserve Chair Janet Yellen Picture: AP
Federal Reserve Chair Janet Yellen Picture: AP
Dearbhail McDonald

Dearbhail McDonald

Just how fast the Federal Reserve hikes rates next year will be the all-important question global investors will be hoping to get answered when the US central bank meets this week.

There is little doubt the Fed will raise interest rates for the first time in a year on Wednesday, with markets pricing in a near 100pc chance for a quarter percentage point increase in its target range.

"With a rate hike being fully priced in, the focus will be on the statement and the updated Summary of Economic Projections," Unicredit economists said in a research note .

Meanwhile, the Bank of England is expected to keep its key rate steady at 0.25pc at a policy-setting meeting on Thursday and well beyond as it juggles risks from inflation, growth and Britain's decision to quit the European Union.

Along with US retail sales data on Wednesday, investors will be looking for any signs that the prospect of anticipated tax cuts and stimulus is already boosting morale.

Closer to home, the Central Bank releases its Residential Mortgage Arrears and Repossessions Statistics tomorrow.

Irish Independent

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