Financial market participants focus on Washington - ANALYSIS

Baku. 18 December. REPORT.AZ/ The Federal Open Market Committee (FOMC) will hold the next meeting today.

Report’s analytical group says that the meeting will last till tomorrow and interest rate wil be revised.

At the meeting held on September 25-26, the interest rates were increased by 0.25 percentage point from 1.75-2% to 2-2.25%, which was the third rise in interest rate in 2018. According to the experts, the neutral interest rate for Fed is 3%. On this level, the US economic growth will face neither lagging nor acceleration. Therefore, the interest rate will supposedly be increased by 0.25 percentage point and reach 3% in 2019.

However, in order to forecast the results of today’s meeting, it is needed to consider a number of economic indicators. For instance, according to official statistics, despite the number of people employed out of agriculture increased by 161,000 people, the unemployment level in the country remained at 3.7%. The growth rate of salaries was 0.2%, down 0.1 percentage from the forecast. In comparison to a year earlier, the salaries grew by 3.1%.

Industrial production in the US increased by 0.6%, up 0.3 percentage point from the forecast. Oil and gold price went down. Profitability of US state bonds declined, USD strengthened against EUR and GBP. That’s US currency is not in a poor condition and all these factors show that the Fed will not increase interest rates.