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4/19/2017, 10:19 PM (Source: TeleTrader)
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Fed's Fischer: Global economy is rebounding

The tightening of monetary policy in the United States is expected to be underpinned by the strengthening of the world's largest economy, said Stanley Fischer, the Federal Reserve's vice chairman. Speaking on Wednesday at a conference organized by the International Banking Research Network (IBRN) and the International Monetary Fund, he stated the weakening of headwinds in overseas risks may bring global growth trends in line with that in the US. It would mirror the developments when the central bank started lifting rates in 1999 and 2004, the policymaker noted.

The permanent voting member of the Federal Open Market Committee underscored the significance of the drop in joblessness in the European Union and a rebound in China. An upsurge in US economy is beneficial for foreign markets, he told participants at the event.

"The reaction in financial markets to the FOMC's decisions to increase the target range for the federal funds rate following its December 2016 and March 2017 meetings – by a cumulative total of 50 basis points – seems benign. The yields on risky foreign bonds, especially in emerging market economies, have continued to decline to below historical norms, and global stock prices have risen," Fischer pointed out, stressing a gradual approach to rate hikes mitigates risks of spillovers abroad and maximizes the scope of economic expansion at home. 

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