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Is the Long Wait for an Interest Rate Increase Getting Longer?
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Is the Long Wait for an Interest Rate Increase Getting Longer?

Knowledge at Wharton·@HashtagPLUS·about 1 month ago
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Interest rates in the U.S. are likely to stay at current low levels at least until June, as the Federal Reserve adopts a wait-and-watch attitude with inflation and job growth at home and stimulus programs in Europe. That is the assessment of Wharton finance professor Krista Schwarz after digesting the Federal Reserve’s latest statement . “A realistic goal [for an interest rate increase] is later in the year than June; it clearly isn’t going to come before June,” said Schwarz. “My own expectation is that headline inflation (a measure of the total inflation within an economy) will drop further and perhaps go negative in the next few months. That, to some extent, ties [the Fed’s] hand in raising rates.” Schwarz elaborated on that against the backdrop of trending U.S. economic indicators and the imminent rollout of quantitative easing (QE) by the European Central Bank on the Knowledge at Wharton show on Wharton Business Radio on SiriusXM channel 111 .…

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