US Federal Reserve expected to keep key interest rate at 5.25%
BANGKOK, Sept 16 (TNA) - The United States Federal Reserve is expected to maintain its key interest rate at 5.25 per cent when it meets next Wednesday (September 20), according to a report issued by BankThai Research Center.
The Federal Open Market Committee (FOMC) is scheduled to meet next Wednesday and is anticipated to keep the US federal fund rate unchanged due to a slowdown in the local property business sector, which is projected to impact the entire US economy during the second half of this year, the report said on Saturday.
Projections have been made that the US economic growth during the last six months of 2006 will be 2.7 per cent, down from 5.6 per cent and 2.9 per cent in the first and second quarter of 2006 respectively.
There are signs that the US economy will continue to be sluggish in 2007.
According to a forecast made by the International Monetary Fund (IMF), the US economy in 2007 will expand only 2.9 per cent, compared to 3.3 per cent projected in April. The 2006 growth forecast was left unchanged at 3.4 per cent.
The IMF said it had lowered its US growth forecast for next year on expectations that local consumption and residential investment growth would slow further as the housing market weakens although strong profits should help business investment rebound.
The Federal Reserve, the US central bank, has increased its key interest rate 17 times in the
past two years, but the measures have failed to fully stimulate the US economy and the FOMC is expected to keep the rate unchanged during next Wednesday's meeting, according to the BankThai report.
With a sluggish economy facing the US, the Fed is anticipated to also keep the federal fund rate unchanged during its October 24-25 meeting. (TNA)--E111