Originally published by Radio Sputnik here.
In a recent internationally broadcast radio interview, I discuss, not only the contents of the summary below, but also my thoughts on why the Fed is currently timid in its decision to raise interest rates and when one might actually expect the Federal Reserve to finally make its move. It’s probably not when you think . . .
The full interview can be heard here, with a brief description below:
As the situation around the expected US Federal Reserve interest rate increase remains uncertain, many IMF officials call on the US central bank finally make up its mind.
This message came during the IMF annual meeting that took place in the Peruvian capital of Lima last weekend.
According to bankers, FED fatigue only puts more pressure on the emerging markets, making them more volatile.
An increase in interest rates is expected to prompt investors to move money back into the United States.
They would thus deprive emerging markets of capital which will also result in weaker currencies and higher inflation.
But delaying the rate hike would not solve the situation – believes deputy governor of Bank Negara Malaysia, Sukhdave Singh.
Other officials express a similar attitude, stating that they would prefer certainty now over the prolonged agony of waiting.
Hear the full interview here.