Macroeconomics
What is certain, is that renteutsiktene in the united STATES can’t be controlled by Twitter messages and unclear statements from president Donald Trump, believes senior economist.
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on Wednesday evening, Norwegian time meet the members of the rentekomiteen in the us central bank the Federal Reserve to voice on this year’s first rentebeslutning.
I think they will emphasize that the prospects will go in the direction of a further, gradual renteoppgang, ” says senior economist Marius Gonsholt Hov, Handelsbanken.
like the rest of the analytikerkorpset think Hov that the interest rate is held stationary in the interval between 0.5 and 0.75 per cent after the meeting.
senior economist Marius Gonsholt Hov, Handelsbanken. Photo: Thomas T. Kleiven
When the interest rate was set up in December surprised, however, members of the committee the market by signalling three interest rate hikes in the year, against the former two. The rationale was, among other things, expectations of more fiscal stimulus with Donald Trump as president.
Since the time is not, however, Trump’s plans for fiscal policy become much clearer, believe Hov:
– It is highly unclear what is going to happen next.
Twitter messages
He thinks, therefore, it is safest for the central bank’s decision-makers to stick to the original plan and direct our attention towards the basic development trends in the economy.
They can not depend on renteprognosene their Twitter messages, and some vague rumblings coming from the edge where the. They need to look at more fundamental things. Therefore, I think that they are on the rentemøtet this week will hold on to guidingen.
the central Bank has a twofold objective for rentesettingen: Maximum employment and inflation over time is at around two per cent.
We have seen that the us economy has improved gradually over time, and the labour market has come into a situation where we have to say that there is full employment in the sense that the unemployment rate is around normal levels and lower than it.
– And we see a tightening in the labour market and that wage growth rises. Inflasjonsutsiktene is thus a little more positive and it goes gradually in the direction of the inflation to stabilize around two per cent going forward, ” says Hov.
also Affects the markets
He believes the markets are also waiting on clear signals from the Trump.
the Uncertainty characterizes the still markets, although the volatility is low, ” he says.
After that renteforventningene began to rise from the summer, shot the seriously up for that Trump was selected and the central bank delivered the expected interest rate increases in December.
So has his guts gone a little out of it. Interest rates have stabilized a bit more on a higher level and the dollar has weakened steadily over the last four weeks. You are probably a bit cautious now with the intention to get more specific signals, ” says Handelsbanken-economist.
I think also the Fed is going to be and also stick with it as are the underlying trends, as they have done over time, independent of the weekly rumblings from Trump, ” says Hov.
“Create great turmoil”
After a little over a week that the president has the Trump among other things, granted the order to build a controversial wall against Mexico, introduced a temporary ban on entry for people from seven muslim countries, and pulled the nation from participation in free trade agreements TPP.
Economist Olle Holmgren in the investment firm SEB points out in an update Monday that the reactions in the financial markets so far have been pretty small and that the measures taken so far launched should not have crucial economic significance.
– The last ukenes statements creates great turmoil, but behind the harsh rhetoric, there are still signs that the biggest fear of american protectionism may not become real.
– Handelsavtalen with Mexico to being renegotiated, and not to be abolished, and the TPP should, according to statements from The white house will be replaced with agreements with the individual countries.
He believes it is nevertheless clear that Trump is willing to go to great lengths to correct 40 years of chronic deficit on the trade balance and the terms of trade with foreign countries.
– That the deficit at the present time, above all, can be explained by China can be a signal of what the next play may be about, write Holmgren.
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