On February 24th Cleveland Fed president Loretta Mester said that the Ukraine conflict might play a part in the pace of rate hikes. The invasion is putting the global economy in uncharted territory. Even though it was little, with the impact that Ukraine had on the U.S economy back in 2014 it is likely that interest rates will be pushing high. The Fed is looking and willing to wait until next month (March) to see if the conflict has an impact on the key policy interest rates. They will just have to keep a close eye and be prepared for the unexpected.
https://www.marketwatch.com/story/economic-impact-from-war-between-russia-and-ukraine-seen-as-limited-for-u-s-11645548528?mod=federal-reserve
I think it makes sense the Fed is waiting until March to see how much the situation in the Ukraine is going to impact interest rates. There is a lot of uncertainty right now, so it will be interesting to see how the US deals with the effects of the situation.
ReplyDeleteThere's definitely going to be an impact on general energy and fuel costs, as a large portion of the world was reliant on Russian natural gas (and petroleum) to power their economies. I am interested to see what time has in store for us
ReplyDeleteI think it is good that the Fed is waiting until March to see how this situation is going to affect our economy. Making a decision too early could cause more problems in the long run as opposed to if they just wait to see how this conflict plays out in the end and how much damage it really does.
ReplyDeleteWaiting on the key policy interest rates in this case sounds like a fantastic idea to me. We have no idea what's coming in these next couple weeks, even days and letting this play out seems very smart.
ReplyDeleteI agree, that waiting would likely be the best idea for the government. The uncertainty of the war in Ukraine is at its peak right now, and waiting to see what happens will be a great benefit to the United States.
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