The Fed Mulls Rising Interest Rate
22 May 2014 15:00 WIB
TEMPO.CO, New York – The US Federal Reserve (The Fed) has begun discussions on increasing short-term interest rates. "The committee's discussion of this topic was undertaken as part of prudent planning and did not imply that normalization would necessarily begin sometime soon," said The Fed in a press release yesterday.
US stock markets reacted positively. Possible interest rate rise was also discussed during Federal Open Market Committee’s (FOMC) meeting on April 29-30. The Fed initially said they would maintain interest rate target at zero percent.
As reported by BBC News, The Fed has determined interest target at zero percent since 2008. The central bank cut interest rate at that time to stimulate economic growth, but some of The Fed members warned to consider raising interest rate.
For that, the meeting included discussions on options to raise interest rate, which has been between zero and 0.25 percent since December 2008. Most observers expect a rate rise in the latter half of 2015.
BBC NEWS | SETIAWAN ADIWIJAYA
