President Donald Trump has said his administration will not label China a currency manipulator, rowing back on a campaign promise. The US president also left open the possibility of re-nominating Janet Yellen as the head of the Federal Reserve, despite having criticized her.
U.S. Federal Reserve raised interest rates on Wednesday for the second time in three months, a move spurred by steady economic growth, strong job gains and confidence that inflation is rising to the central bank's target. The decision to lift the target overnight interest rate by 25 basis points to a range of 0.75% to 1.0% marked a convincing step in the Fed's effort to return monetary policy to a more normal footing.
Robust hiring by United States employers in President Donald Trump's first full month in power, along with rising wages, have economists tipping a faster-than-anticipated cycle of interest rate increases by the US Federal Reserve, beginning this week.
Federal Reserve chair Janet L. Yellen said a March rate hike would be “appropriate” if the economy continues to evolve as expected, signaling that the central bank will likely raise its benchmark interest rate sooner than many economists and investors had expected just a few weeks ago.
The U.S. economy expanded at a modest-to-moderate pace from early January through mid-February, the Federal Reserve said on Wednesday, although firms were less optimistic amid some uncertainty about the Trump administration's fiscal policies.
United States unemployment rate fell to a nine-year low in November, adding to expectations that US interest rates will rise later this month. Figures from the Labor Department showed the US economy created 178,000 jobs in November, while the jobless rate fell to 4.6% from 4.9% in October.
The United States Federal Reserve chair Janet Yellen told Congress on Thursday that she is not stepping down. Her statement follows on strong attacks during the campaign from president elect Donald Trump who claimed the Fed was favoring president Barack Obama and candidate Hillary Clinton with its low interest rate policy.
By Kenneth Rogoff
Markets nowadays are fixated on how high the US Federal Reserve will raise interest rates in the next 12 months. This is dangerously shortsighted: the real concern ought to be how far it could cut rates in the next deep recession. Given that the Fed may struggle just to get its base interest rate up to 2% over the coming year, there will be very little room to cut if a recession hits.
The US economy grew at the fastest pace in two years in the third quarter, initial figures have indicated. The world's largest economy grew at an annual rate of 2.9% in the three months to September, the Commerce Department said. Analysts had predicted growth of just 2.5%.
Federal Reserve Vice Chairman Stanley Fischer said a rising tide of opposition to international trade and integration threatens global growth. Global trade this year will grow at the slowest pace since 2007, according to the World Trade Organization.