Contrary to all the negative projections made by anti-Trump
media houses to scuttle his ascendancy to the US presidency, recent data has
revealed that the US economy has been experiencing steady growth. As a result,
the government is now set to adjust the cost of borrowing to suit the current
trend in order to keep the economy booming.
The Federal Reserve has now put interest rates by a quarter
of a percentage point - the second rise in three months, due to improvements in
key sectors of the US economy. Report shows that about 235,000 jobs were
created in February, a growth which has proved all the project fear campaigners
to shame.
Within the period, US shares experienced some gains, while
the USD fall abruptly due to lack of plan that rates might rise.
The Fed's forecasts also saw the US economy developing by
2.1% in 2017, unchanged from its December forecast.
The latest rise in rates was due to the official jobs
figures published on Friday, which were better than what was projected.
Steadily increasing rates are a sign that the US is
gradually being weaned off the stimulus of cheap borrowing costs that helped
nurse it back to health after the recession.
Fed chair Janet Yellen said: "The economy continues to
expand at a moderate pace."
Economists think the next Fed hike will come no earlier than
June as the central bank will want time to assess the likelihood that Mr
Trump's plans will be passed by Congress.
However, Rising US rates have some kind of global consequences
especially for developing countries most susceptible to higher dollar borrowing
costs.
It contrasts with the UK, where rates were slashed to 0.5% in
2009 and cut further to 0.25% in the wake of last year's Brexit vote.
Lucy O'Carroll, chief economist at Aberdeen Asset
Management, told Sky News it would have been an "enormous surprise"
if the Fed had not raised rates in its latest policy announcement.
She said policymakers did not seem too worried about the
possibility of soaring inflation.
"I think it was a very measured and reassuring
message," she said.
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