Report: Stability in global economy will continue until US lift discount rate to 3.5%

Baku. 22 November. REPORT.AZ/ No serious adverse event is expected in global financial markets until US Federal Reserve System (Fed) increases discount rate to 3,5%.

Analytical Group of Report News Agency informs, in order to increase discount rate to this level it is enough to bring inflation to 2% in the country. For speeding up the inflation, the US will use all the means available.

Notably, the annual inflation in the US was 1.3% in October.

It is forecasted that the US will keep dollar rate low for speeding up inflation and also will keep raw material prices high, especially oil will maintain stability at high prices. The Analytical group predicts that the rate of the main currency pair (euro / dollar) will remain at the range of 1.14-1.21 USD/EUR, and the Brent oil will be in the range of $ 55-65/per barrel: "Towards the middle of 2018, US dollar rate at this level will lead to inflation in the US and even exceed 2% target. As a result, it is expected that the Fed will accelerate its increase in discount rate”.

The US government's revision of trade agreements with other countries and continuation of various antidumping decisions will also increase inflation in the country.

Analytical group believes, Fed will increase discount rate to 1.25-1.50% in December and up to 3% by mid-2019. It is not excluded that during this period the Fed will increase discount rate by 0.5 percentage points.

Analytical group predicts that world economy and financial markets will face a pessimistic mood in the first quarter of 2019.