U.S. Federal Reserve interest rate increase this year may be difficult

Wednesday the Fed released the minutes of the meeting, the Fed last month decided to keep rates unchanged when he hinted that, in view of the market, the economy and inflation prospects facing the uncertainty of interest rate policy may continue to remain unchanged, interest rate increase is still Hopeless.

According to the U.S. Federal Open Market Committee (FOMC) 6月24日至25, the minutes revealed that the basic view that the members of the Committee since the last FOMC meeting, although the risks to economic growth has declined, but inflation risks are still rising Strengthening. This shows that despite economic growth is facing significant downside risk, but officials hinted that they were still on inflation worries even in economic growth. In addition, the meeting minutes, Fed officials have made the first half of this year's more moderate, and a slight slowdown in the second half of the expected.

Based on the expected inflation and inflation worries, while interest rate increase may be the Fed's next interest rate adjustment, but most members felt that, given the economic activities and the prospects for price pressures are still unknown and therefore the future timing and implementation of policies and measures Intensity can hardly grasp. This shows that the support of the minutes of the market for at least the end of the year the Fed will keep policy unchanged expectations. JP Morgan Chase had previously forecast, the Federal Reserve will keep interest rates at the current level of the end of the year, while in the first quarter of next year will raise interest rates.

In addition Fed Chairman Ben Bernanke on Wednesday to answer a question by Senator Ron Paul also said that U.S. inflation too high, and reiterated the Fed's goal is to achieve price stability. Previously, the U.S. Labor Department announced that June consumer price index (CPI) rose by 1.1 percent, the second highest since the 1982 increase, the highest increase since 2005. The core CPI rose by 0.3 percent. Both are higher than Wall Street had forecast. So Bernanke said that to maintain price stability is very important. He pointed out that energy and commodity prices soared by the Fed caused by factors beyond the control of.

And Ben Bernanke also reiterated that the United States economy is facing many difficulties, the economic downside risk and implied that the Fed is still the main trouble. He in on the 16th to the House of Representatives Financial Services Committee in prepared testimony that the financial markets to help restore more normal function of the Federal Reserve will continue to be the top priority. In recent weeks, including Lehman Brothers and the United States before the two mortgage agencies Fannie Mae, the premises of the U.S. stock tumbled, making investors in the U.S. financial markets are worried about the future. Affected by this, the dollar also can not escape the fate of the crash, on the 15th of the euro exchange rate fell below 1.60 mark, as yesterday - 20:24, the euro-dollar exchange rate was 1.5862, the dollar exchange rate of 105.76 yen.

The dollar recently fell, Bernanke claimed that only in exceptional circumstances shots intervene in the foreign exchange market, he can expect dollar in the medium term reflects a more robust U.S. economy. However, he also said that if the market disorder, have reason to intervene in foreign exchange markets to take interim action. Bernanke at the House of Representatives Financial Services Committee to testify on that, if effective decision-makers in the United States and strong economic growth, then will be reflected in the medium term on the strength of the U.S. dollar. He said that a strong dollar is the basic way through a strong economy to support.