TAIPEI, Taiwan, Dec. 13, 2017 /PRNewswire/ - Clifford Beaumont has reported that the Federal Open Market Committee (FOMC) of the Fed decides the level of the interest rates and reveals the direction of its monetary policy.
The meeting goes on amid an economic growth in advanced economies. Clifford Beaumont research analysts are expecting the sharpest tightening in the last ten years, which will be led by the US and the EU.
Key economists at Clifford Beaumont have expressed that they expect the interest rates in developed economies to reach no less than 1% in 2018 thanks to the global economic growth, which shows the best period since 2011. If this happens, we will see the steepest rate hikes since 2006.
Dimitri Vidic, Director of Mergers & Acquisitions at Clifford Beaumont commented on the situation "This week should open our eyes in relation to the medium-term direction of the world economy. The Fed and the European Central Bank will make the headlines."
In addition, the tightening will take place by changing the quantitative easing terms. In the US, these stimulus programs started in 2008 as a response to the financial crisis caused by the housing market.
Bloomberg Economics anticipates that net asset buying by the central banks will decline at the end of next year to$18 billion per month, from $126 billion in September. During the first half of 2019, analysts expect negative changes.
Speaking about the expectations, Head of Corporate Trading at Clifford Beaumont, Patrick Morris added: "Given that the world economy is expected to gain 4% in 2018, we may see the largest contraction in stimulus programs."
Several banks decide the borrowing costs for over 30% of the global economy besides ten other central banks are expected to unveil their rate and policy changes this week.
The Fed is getting the most attention on Wednesday after most of the analysts' forecasts called for a rate hike by 0.25%. The head of the US central bank, Janet Yellen, is expected to announce more hike for the next year.
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SOURCE Clifford Beaumont