The Federal Reserve (Fed) will continue to raise interest rates, according to the minutes from the central bank’s latest meeting in September.
Federal Open Market Committee officials shared concerns that inflation may overshoot the Fed’s target and the economy may be overheating. They also predicted the central bank will raise its benchmark rates to a mildly restrictive level of above 3 per cent in case prices start climbing up too fast.
Any rate increases will strengthen the greenback further, with the Dollar Index, a basket of the greenback against its peers, up by almost 1 per cent this week.
In global trade news, US President Donald Trump wants to withdraw from a 144-year-old Universal Postal Union treaty that sets fees for deliveries around the world for developing, including China, and wealthier countries. As a result, the treaty allowed Chinese companies to ship small packages to the US at a heavily discounted rate, undercutting American competitors.
Meanwhile, the Pound continued to fall against the Dollar after inflation data revealed prices only rose by 2.4 per cent in August – below the 2.6 per cent economists forecast. Easing inflation is welcome news for the Bank of England (BoE) that is likely to hold back on raising interest rates until after a Brexit deal has been reached.
However, this dip in inflation may be short-lived. Basic wages grew at 3.1 per cent in August – the fastest pace in nearly a decade. This, in turn, should boost consumer spending, adding to inflationary pressure in the coming months.
Data provided by