Will Fed give a signal to reduce discount rate? - COMMENT

Baku. 27 July. REPORT.AZ/ Another meeting of the Federal Reserve System (Fed) will be held tomorrow.

Report informs, it's expected that the Fed chief Janet Yellen in her speech will signal a rate hike in September. According to the survey of Bloomberg news agency, 50% economists expect increase in interest rates in September. The Fed keeps interest rate at around 0.25% since December 16, 2008, when it was implemented last drop of 0.75 percentage points.

The Fed's discount rate in last 15 years ranged from 0.25% - 8%.As can be seen from the following graph, the discount rate of the Fed has started to decline in 1991 to 8% and now amounts to 0.25%.

Since the beginning of the Fed raising interest rates, US dollar is expected to strengthen and commodity prices will decline.

Also, the inflow of liquid funds in US government bonds will lead to a reduction of liquidity in the global credit markets.This process will cause serious damage to the economy, mainly in developing countries.