U.S. Fed Play Wait And See

The U.S. Federal reserve is in no haste to move the interest rate from its record low of 0% since 2008.

However, there is a change in its language as the word “patience” no longer populates the oft uttered statement from the Fed.

The Federal Reserve chair, Janet Yellen, said it best, “Just because we removed the word patient from the statement doesn’t mean we’re going to be impatient.”

U.S. Fed PlayThe Fed has taken a wait and see attitude as they watch for further improvement in the U.S. labor market before any attempt in moving up the interest rate.

This of course means that local companies can continue to take advantage of the prevailing low interest rates within the U.S. market.

On the announcement of non-increase in rates, the market rally to push the DOW Jones up by 0.9% and the S&P 1%.

Market watchers viewed the Fed inaction as an indication of the uncertainty  which still persists within the economy.

The fact is although there are signs of improvement within the economy unemployment and low wages continue to be a drag.

In addition, the recovery in the housing market is still not where it ought to be and exports have slowed as the value of the dollar has climbed.

Davy Desmond, Readers Bureau, Fellow

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