Analysts predict FED to start interest rate hikes in the summer of 2015 after press conference by chairwoman Janet Yellen on Wednesday.
ANKARA – Analysts predict the U.S. Federal Reserve System (FED) will begin interest rate hikes in the middle of 2015, following statements made by its chairwoman Janet Yellen during a press conference on Wednesday.
As she announced an additional US$10 billion in reduction of bond purchases on Wednesday -- in line with market expectations -- Janet Yellen indicated a potential timetable for a first hike in interest rates.
“We haven’t encountered a surprise from FED yesterday," said chief market analyst at Commonwealth Foreign Exchange Omer Esiner. "Interest rates will start to increase in middle of 2015.”
FED policy has been to keep interest rates low as long as the unemployment rate remains above 6.5 percent.
But on Wednesday, the FED announced that it would cease to exclusively use the 6.5 percent figure as instigator for the first tax rate hike, instead favoring a wider range of data.
Yellen then mentioned that this interest rate hike could occur “around six months” after the end of asset purchases, due in October 2014.
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