What will be the FED's next move?

Economists are increasingly convinced that the Federal Reserve's interest rate policy is over. They are now tuned to lower interest rates.

In a Wall Street Journal survey, 51% of economists believe the Fed's next move will be a reduction in interest rates, with 49% believing that they will continue to rise. Bank representatives already openly comment on the conditions in which they would take such a move. This has led investors to believe that there is a 58% chance of reducing interest rates by the end of 2019. However, their expectations until 2012 are that the Fed will keep rates between 2.25% and 2.50%.

In their latest speeches from the Federal Reserve, they expressed their confidence that they could wait with interest. But behind these speeches lies their concern about inflation. Many believe that the cumbersome inflation will cause the federal to cut interest rates. In 2018, inflation reached the target of 2% but, according to the latest figures, it has fallen below the desired level, ranging around 1.5%.

The closely monitored inflation rate and the ability to keep prices low causes many economists to believe that this will negatively affect interest rates, and that the Fed will undertake a completely new course of monetary policy.

Source: The Wall Street Journal

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