Monday 8 January 2018

2017th sent the financial crisis in history? (1)

The past year 2017 finally sent the shadow of the financial crisis, towering over the markets for nearly a decade. Investors finally stopped worrying that we could see a secondary crisis and started to invest boldly.
The Fed raised the interest rate three times, which is undoubtedly one of the clearest evidence that there are no signs of a storm on the horizon. At the same time, Fed is expected to do so three more times this year.
At this stage, however, fears of normalizing interest rates are still in the background. Investors would rather be worried that the reserve would become less aggressive in its action on interest rate rather than raising it. Because that would be the first symptom of a potential slowdown in the state of world economy.
Unemployment in the US is at a 17-year minimum of 4.1%. The only worrying factor that may bother the Fed and other central banks around the world is still the low level of global inflation.
It is very likely, however, that in an environment of record low unemployment, inflation will begin to rise in the new year and justify the US reserve policy in the direction of interest rates.


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