 |
 |
 |
| |
| |
Interest
rates may rise
Jul 22, 2004
Before the committee on banking, federal reserve chairman Alan
Greenspan said "Economic developments in the United States have
generally been quite favourable in 2004, lending increasing
support to the view that the expansion is self-sustaining. Not
only has economic activity quickened, but the expansion has
become more broad-based and has produced notable gains in employment"
He went on to cover the general economic situation faced by
individuals and businesses alike, outlining the challenges that
the central bank faces in the near future and stating "If economic
developments are such that monetary policy neutrality can be
restored at a measured pace, a relatively smooth adjustment
of businesses and households to a more typical level of interest
rates seems likely".
Wall Street economists have taken this statement as an indication
that the Federal Reserve will continue raising rates this year
by 25 basis points at three of the next four meetings left this
year, resulting in the federal funds rate sitting at 2.0 percent
by year-end.
A rise in interest rates will be good news for those with savings,
however it will affect the cost of borrowing, so whether this
possible rise is good news or bad will depend very much on your
situation.
|
|
|
 |
|
 |
|