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Summary of March FOMC Minutes 2016

April 7, 2016 8:23 pm

FOMC Minutes issued on the basis of 15/16 March, 2016 fomc meeting . The following summary of minutes of detailed discussion between the FOMC officials:

  • Decline in financial market and instability this year.
  • Risks remained continue to downside of growth and inflation.
  • Strong dollar downward pressure on net exports and also on economic growth.
  • Monetary and fiscal policy is not positioned well to assist the economy.
  • Above said views resulted by current estimate for economic growth and inflation.
  • FOMC officials discussed about that more gradual rise in interest rates.
  • Household spending growing up and expected further improve this year.
  • Business investment remain slow.
  • Reducing housing demand due to low oil prices, but housing sector expand this year.
  • Members agreed that inflation pressures will remain subdued.
  • Low inflation reason low energy prices.
  • Members expected that inflation rise to near Fed target 2%.
  • Tightening labor market conditions could lead to higher inflation.
  • FOMC decision is that to delay tightening until uncertainty in global growth abate.
  • Some member agreed for monetary policy tightening this year.
  • External developments play important role in policy decision of Fed.
  • Weaker foreign demand reason financial market turmoil.

We are observing that April or June interest rate hike negative impact on emerging market and developing markets and also negative impact on net exports of U.S. The President of Federal Reserve Janet Yellen not agreed to interest rate hike in April and June, as per Fed dot plot September is suitable for interest rate hike. Furthermore, we are expecting that just one rate hike this year, because the stronger dollar effect the global economy and also negative impact on import /exports,  stocks.

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