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Report: Fed will probably increase the interest rate by 0.25% next week - ANALYSIS

The Federal Open Market Committee (FOMC) will hold its next meeting on March 19-20.

Report’s Analytical group reminds that FED had made a decision to keep the interest rate at 2.25-2.5% at the meeting held on January 29-30.

However, the Fed stated that the interest rates may be increased by the year-end depending on the situation.

It’s no secret that while increasing the interest rate, Fed tries not to affect population’s employment, keep the inflation at the level that would stimulate the economic development. That’s the Fed takes into account that the interest hike may make the bank loans more expensive and consequently, GDP value may grow

However, Fed Chairman Jerome Powell’s positive statements about US economy show that the interest rate will most probably increase by 0.25%.

By the way, on the eve of Fed meeting, dollar rate against euro is declining. USD/EUR rate went up from 1.1193 on March 7 to 1.1305 yesterday. Currently, the USD/EUR rate is 1.1319.

Report’s analytical group believes that if Fed increases the interest rates, 1 EUR may drop up to USD 1.1. Keeping interest rate stable may lead to USD/EUR reaching 1.2. 

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