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Report: Investors start thinking about steps Fed may take in 2019 - ANALYSIS

The last increase in interest rate will also affect Azerbaijan’s economy

Baku. 20 December. REPORT.AZ/ US Federal Reserve System (Fed) has justified the expectations of financial market participants and experts for 2018.

Report’s analytical group reminds that the Federal Open Market Committee (FOMC) yesterday increased interest rates from 2-2.25% to 2.25-2.5%, thus making it the fourth time Fed is increasing the rates this year.

Investors are now interested in the steps to be taken in 2019 Though the Fed chairman Jerome Powel hinted at increase of interest rates two times in 2019, said that the Fed observes global political and economic processes, assesses their impact on Us economy, there is no stability in the market yet. This is also proved by decline in Dow Jones, S&P 500 and Nasdaq.

Unlike Fed chairman, several analysts and investors, and even US President Donald Trump  are against continuous increase of the interest rates. According to them, the interest rate in the country is at necessary level. So, Fed, which does not depend on the US authority, has been exposed to pressure by the authority.

Report’s analytical group belives that yesterday’s increase in interest rate will not bypass Azerbaijan’s economy and will, first of all, cause depreciation of financial instruments of our country (along with the increase in their annual profitability). The matter is that the rise in the interest rate in the US increases the interest of securities in the national currency of this country and investors reject developing countries’ bonds. Azerbaijan’s Eurobonds are also not ruled out in this regard.

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