Yesterday the U.S. central bank’s chairman, Jerome Powell, said the Federal Reserve’s interest rate hikes may not pose as big a risk for global financial markets and emerging market economies as many have thought. Moves by the Fed and other major central banks to raise interest rates after a long period of keeping them low should not be disruptive to the global economy.
In remarks prepared for a financial conference in Zurich, Powell said financial markets have gotten the message on the U.S. central bank’s plan for gradual interest-rate increases and “should not be surprised” by its actions.
The pickup in both global growth and commodity prices have played bigger roles in the recent recovery of capital flows to emerging market economies than any policy moves by central banks, he said. U.S. central bankers have raised the benchmark lending rate six times since December 2015, including at their meeting in March, and pencilled in two or three more increases this year.
13:30 – USD – Producer Pricing Index expected to decrease to 0.2%