Better wait with further interest rate hikes?

//Better wait with further interest rate hikes?

Better wait with further interest rate hikes?

Reuters: For Fed, sell-off could point to fading Trump stimulus

Article published: Oct 23, 2018

IB Economics syllabus: Macroeconomics  (economic growth, monetary policy)

The Fed (Central Bank of the United States) is in the process of increasing interest rates. This is definitely necessary as the U.S. economy is getting close to overheating, expanding “at an annualized 4.2 percent rate, more than twice its potential.” However, as Trump’s fiscal stimulus “from U.S. tax cuts and government spending will fade sooner than expected,” it might be a better option to wait a bit with further interest rate hikes in order not to risk a larger drop in economic growth.

Source of image: REUTERS/Al Drago

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By | 2018-11-21T06:14:49+00:00 October 24th, 2018|Macro|Comments Off on Better wait with further interest rate hikes?

About the Author:

My name is Daniel Szekely and I work as an IB Economics tutor, examiner and teacher. Having earned an MA degree in Economics at the University of Aberdeen, I became a financial analyst at Morgan Stanley, one of the largest investment banks of the world. Yet, despite the promising career prospects of the banking industry, I decided to make a larger social impact by becoming a teacher. Currently, I teach IB Economics at SEK Budapest International School and have been an examiner for over 5 years. I started EconDaddy as a simple blog to share great articles with my students and others taking IB Economics around the world to use for their commentaries. Being a practicing IB Economics tutor, I have first hand insight into the most common mistakes of students, so the EconDaddy blog now also provides exam and commentary writing tips.

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