The Logic Behind The US Federal Reserve'S Low Interest Rate

Tony Sagami, an analyst at Mauldin Economics, expects that the Federal Reserve will keep interest rates low for a long time.

After raising interest rates in December last year, the Fed said that the rate hike in the future would be gradual and would make decisions based on data.

"Since the interest rate hike in December last year, there has been no real change in the US economy," he said.

We don't even see the Fed's inflation target coming closer to achieving this -- let alone Yellen's other ambition ambitions.

The expert said: "regarding the timing and magnitude of the adjustment of the future federal funds interest rate, the Fed will assess the realized and anticipated economic situation related to the full employment target and 2% inflation target."

The following is the 3 of Dali's interest rate increase by Sam that the Federal Reserve will not raise interest rates soon.

The reason for the central bank's interest rate hike is to slow down the overheating of the economy.

However, the United States barely sees signs of economic growth, let alone overheating.

According to the Fed's March report, the US industrial production fell by 0.5% in February compared with 0.8% in January.

Before the Fed raises interest rates further, it needs to see that inflation hits the 2% target.

However, cheap energy and falling commodity prices have kept inflation at an extremely low level, and this will not change in the short term.

The Fed will wait for the "further improvement of the labour market and inflation back to 2%" to further raise interest rates.

The United States is a consumer oriented country, but wage growth in the United States has been stagnant for many years.

In fact, the average annual salary of American workers after inflation adjustment has not risen since 1973.

An important reason for the stagnation of wages is a sharp rise in the cost of Medicare guaranteed by employers, even though the total salary is rising, but there is no salary to take home.

So all of the above may prevent the fed from raising interest rates further.

"We are more likely to see another round of quantitative easing before the Fed raises interest rates," he said.

Williams, chairman of the San Francisco Federal Reserve, suggested that "if the Fed needs to cut interest rates again and use other tools if necessary," John hinted at this point, "Williams."