Chair Yellen Reveals Roadmap for Federal Fund Rate Increase

Published in MK
(South Korea) on 20 June 2015
by (link to originallink to original)
Translated from by Jason Lee. Edited by Bora Mici.
Federal Reserve Chair Janet Yellen reaffirmed the possibility of raising the federal fund rate this year, but the recent analysis shows that the preferred timing is December rather than September. Reflective of this, the NASDAQ point value rose to 1.34 percent on June 18, the highest rise ever recorded.

At the conclusion of the Federal Open Market Committee’s (FOMC) two-day conference, only two of its committee members voted for a raise in the federal fund rate for next year, while 15 members preferred this year. However, in a noticeable change, the numbers of FOMC members who want only one raise in the federal fund rate for 2015 increased to seven from its previous poll of three last March.

This change of goal of the Federal Reserve Board is based on the analysis that the American economy has been revitalizing since the second quarter of this year, but the rate of its regrowth is slower than what was originally anticipated. Ms. Yellen noted that “the improvement in household spending, job creation and the housing market goes on,"* but nonetheless lowered the estimated American economic growth rate to 1.8 percent, approximately 2.0 percent from its March estimate of 2.3 percent to 2.7 percent. The number is noticeably lower than the estimations of the International Monetary Fund (IMF) and the World Bank, which predicted 2.5 percent and 2.7 percent, respectively.

Ms. Yellen, who seemingly has taken into account the concern of the IMF and the World Bank that the rise in the federal fund rate in the U.S. will impede the recovery of the global economy, stated that "the importance of the timing of a first decision to raise rates is something that should not be overblown, whether it’s September or December or March – what matters is the entire path of rates,” hinting a continued effort in quantitative easing.

After analyzing the FOMC conference and its outcomes, the South Korean government also concluded that the rise in the federal fund rate in the U.S. will have little effect on the South Korean domestic market. There certainly isn’t good reason to overreact in this matter, especially when domestic spending and investments have slowed down due to panic over the MERS outbreaks.

*Editor's note: Correctly translated, this quote could not be verified.


[사설] 옐런 美 연준의장이 밝힌 금리인상에 대한 구상
재닛 옐런 미국 연방준비제도이사회(FRB) 의장이 기준금리를 연내 인상할 가능성을 재확인했지만 첫 금리 인상 시기는 9월보다 12월을 선호하고 있다는 분석에 힘이 실리고 있다. 그리스 구제금융 협상 결렬에도 불구하고 18일 미국 나스닥지수가 1.34% 상승하며 사상 최고치를 갈아치운 배경이다.
미국 연방공개시장위원회(FOMC)가 17일 이틀간 일정을 마감한 결과 내년에 기준금리 인상을 주장한 위원은 2명에 불과했고, 올해 인상을 희망한 위원은 15명에 이르렀다. 다만 금리를 인상하더라도 올해에는 한 차례 이하일 것이라는 FOMC 위원이 지난 3월 3명에서 이번에는 7명으로 늘었다.
미국 경제가 2분기부터 회복세로 돌아섰지만 그 속도가 당초 예상보다 미약하다는 판단에 따른 것이다. 옐런 의장은 "미국 가계소비, 일자리 창출, 주택 시장 회복세가 지속되고 있다"고 평가했지만 올해 미국 경제성장률 전망치를 3월 2.3~2.7%에서 이번에는 1.8~2.0%로 대폭 낮췄다. 국제통화기금(IMF), 세계은행이 내놓은 전망치 2.5%, 2.7%보다 크게 낮은 수준이다.
옐런 의장은 "첫 금리 인상이 9월, 12월 또는 내년 3월일지는 중요하지 않다"며 "더 중요한 것은 첫 금리 인상 후에도 연준이 높은 수준의 통화완화 정책을 지속할 것이라는 점"이라고 했다. 그리스 구제금융 협상이 변수로 남아 있는 가운데 미국 금리 인상이 자칫 세계 경제 회복세에 찬물을 끼얹을 수 있다는 IMF·세계은행 등의 우려를 감안한 것으로 보인다.
우리 정부도 FOMC 회의 결과를 검토한 뒤 미국 금리 인상으로 인한 국내 영향은 크지 않을 것으로 진단했다. 가뜩이나 메르스 사태로 얼어붙은 국내 소비·투자 심리가 글로벌 변수에 과민 반응하는 일은 없도록 해야 할 것이다.
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