On Wednesday 15th of June, Fed was deciding whether to raise or not to raise interest rates. As expected by most of surveyed economists, interest rates remained unchanged.
The main reasons behind this were weak data from labor market in late May and slow economic growth, whose projections for this and next year were cut.
Another factor that was taken into account were risk and possible negative consequences for global economy if Britons will vote in favor of Brexit next week. “I think it’s fair to say that it was one of the factors that factored into today’s decisions,” said Yellen on question if and how Brexit influenced Fed´s decision. “Obviously how that turns out is something that will factor into future decisions,“ added Yellen.
Not all data were weak, we can see rise in consumer spending. Optimism about future economy strengthening and rise of inflation can be seen in a signal from Fed that they still plan to raise rates twice this year. Also 6 out of 17 members of FOMC project rate hike, even though only one this year.
American stock indexes held gains most of the time yesterday, but fell into red numbers in the end of trading session.