Fed seen deferring rate hike despite unemployment fall

Critics say the ultra-low rate set by the Federal Reserve, pictured here on August 1, 2015, is no longer helping growth but is feeding excessive speculation and overly high prices in asset markets, threatening to spark inflationThe Federal Reserve is expected to put off a long-planned interest rate increase this month despite another fall in the US jobless rate, placing concerns about China ahead of US data. Analysts said Friday that the mixed August jobs report — job creation slowed to 173,000 but unemployment fell to 5.1 percent — backed the Fed launching on a long-awaited series of rate hikes to “normalize” monetary policy after years in crisis mode. “Their main concern has not been the current state of the domestic economy, which we know has been strong, but fears about possible spill-overs from China and the stock market volatility on future activity,” said Harm Bandholz of UniCredit.

Share this article