US Central Bank Appears Headed Toward Boost in Benchmark Interest RatePolicy makers at the U.S. central bank, the Federal Reserve, started a two-day meeting Tuesday in Washington, with economic analysts predicting they will increase the benchmark interest rate for the first time in nearly a decade.A jump in the rate the Fed sets for the country's most credit worthy institutions when they borrow and lend overnight funds to each other could lead to corresponding increases in the interest rates on loans for U.S. businesses and consumers, forcing them to pay more to borrow money.The Fed has kept the interest rate as low as possible to boost lending and economic activity in the United States as it recovered from the depths of the steep recession in 2008 and 2009 that was the worst in the country since the Great Depression of the 1930's.But now the U.S. economy, the world's largest, is adding about 200,000 jobs a month, its jobless rate is at a historically typical five percent, and the economy is expanding at a modest, if not robust pace.Fed chair Janet Yellen said earlier this month that a rate boost now "will be a testament ... to how far our economy has come in recovering from the effects of the financial crisis and the Great Recession."The rate boost could be the first of several if the U.S. economy continues to improve. Yellen and other policy makers say a "gradual" series of rate hikes could be imposed in the coming months to keep the economy from expanding too rapidly and hold inflation in check.
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