FED: U.S. economy run too strong could cause major problems

FED: U.S. economy run too strong could cause major problems

- in ECONOMY, main, World
27
Comments Off on FED: U.S. economy run too strong could cause major problems

The U.S. economy run too strong could cause major problems down the road if left unchecked, the Federal Reserves said Thursday.

“A prolonged period in which the economy operated beyond potential could give rise to heightened inflationary pressures or to financial imbalances that could lead eventually to a significant economic downturn,” according to the  the Fed’s June 12-13 meeting.

As a result, almost all officials at the central bank believe they should continue to raise interest rates on a regular basis. That comes even amid substantial worry that current tensions between the U.S. and its trading partners could stall the growth the economy has seen this year.

The central bank increased its benchmark interest rate by 25 basis points June 13. It was the second rate hike this year and the seventh since December 2015. The bank made three rate hikes last year and one in December 2016.

Some members of the Federal Open Market Committee (FOMC) also stressed in the minutes that uncertainty and risks about trade policy have intensified, and warned they could have negative effects on business sentiment and investment spending.

Recent changes in Washington’s trade policy have brought the U.S. against China in a potential trade war, and could hurt growth in the American economy if importers are forced to pay higher duties.

Source: AA.

About the author

Related Posts