WASHINGTON – Federal Reserve officials, worried about weak growth overseas, agreed last month that they would begin raising interest rates only when measures of the economy’s health and inflation signalled the time was right.Minutes of the Fed’s discussions at the Sept. 16-17 meeting released Wednesday showed that officials expressed rising worries about lacklustre growth in Europe, as well as slowing growth in Japan and China.Stocks surged after the release of the minutes. Investors appeared to take the revealed discussion as a sign that the Fed was in no hurry to raise interest rates. The Dow Jones industrial average was up more than 270 points in afternoon trading.“The markets like the news that there is no urgency on the part of Fed officials to stop doing what they are doing,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.Fed officials also discussed the potential adverse impacts of a stronger dollar, which has gained strength recently against the euro, yen and British pound. A stronger dollar makes U.S. goods more expensive overseas and foreign goods cheaper in the United States, a development that can dampen inflation.“Some participants expressed concern that the persistent shortfall of economic growth and inflation in the euro area could lead to a further appreciation of the U.S. dollar and have adverse effects on the U.S. external sector,” the minutes said.At the September meeting, the Fed voted 8-2 to keep its key short-term interest rate at a record low near zero and retained language that it expected the rate to remain at that level for a “considerable time” after it ends monthly bond purchases. The minutes showed that some officials didn’t think that was clear enough.The current language “could be misunderstood as a commitment rather than as data dependent,” the minutes said.But the minutes also showed that officials worried that any tweaks to the wording of the policy guidance could be misinterpreted as a fundamental shift in the Fed’s stance on interest rates, which could trigger an unintended rise in market rates.Many participants indicated that they wanted to clarify that monetary policy changes would be closely linked to the country’s economic performance.The Fed has emphasized that the timing of an interest rate hike will depend on officials’ views on how close the economy is to achieving the Fed’s goals for maximum employment and inflation running at an annual rate of 2 per cent.For the past two years, inflation has been running well below 2 per cent, giving the Fed room to keep rates at a record low in an effort to bolster the economy and generate more jobs. The government reported last week that the unemployment rate in September fell to a six-year low of 5.9 per cent, closer to the Fed’s goal of an unemployment rate in a range of 5.2 per cent to 5.5 per cent.The minutes were released with the customary three-week delay following the Fed’s last meeting.The consensus view among private economists is that the first rate hike will not occur until around June of next year. The Fed’s short-term rate has been at a record low near zero since December 2008.The Fed’s bond purchases, designed to keep long-term interest rates low, have been trimmed in seven consecutive $10 billion reductions at each meeting starting last December. The purchases are currently at $15 billion and a final reduction to zero is expected at the next meeting on Oct. 28-29.The two Fed officials who voted against the September action were Charles Plosser, president of the Fed’s regional bank in Philadelphia, and Richard Fisher, president of the Dallas Fed.Both objected to the decision to signal “considerable time” before the first rate increase. Plosser and Fisher are leading hawks, Fed officials who are concerned that low interest rates could generate unwanted inflation pressures in the future. They are also worried that the Fed’s policies could be inflating asset bubbles that could burst and destabilize financial markets. Fed officials express concerns about global economy, rate guidance wording AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email by Martin Crutsinger, The Associated Press Posted Oct 8, 2014 12:01 pm MDT
“The Africa we want is an integrated, peaceful and prosperous continent. It must be a place where employment opportunities are available for those who seek jobs, and where children go to bed with full bellies, rather than hunger pangs,” said General Assembly President Sam Kutesa at a panel discussion at UN Headquarters in New York.With a population of about 1.1 billion people, a combined GDP of over 2 trillion dollars, and impressive rates of economic growth, the continent continues to attract investment, added Mr. Kutesa, who has previously also served as Uganda’s Minister for Foreign Affairs. The rate of return on investment is higher in Africa than in any other developing region, and foreign direct investment inflows into the continent reached over $50 billion in 2013. Today’s high-level panel discussion held by the UN Economic and Social Council (ECOSOC) focused on “The Africa We Want: Support of the United Nations System to the African Union’s Agenda 2063” – a development vision that is driven by Africa’s own citizens. The panel kicked off what has become informally known as “Africa Week” (13 to 17 October) at UN Headquarters, a series of high-level discussions and events held on the margins of the 193-member General Assembly’s annual consideration of the landmark New Partnership for Africa’s Development (NEPAD), and other vital issues concerning for the continent. Joining Mr. Kutesa were Jan Eliasson, UN Deputy-Secretary-General; Maged Abdelaziz, UN Under-Secretary-General and Special Adviser on Africa; and several representatives of the African Union (AU), including Smail Chergui, its Commissioner for Peace and Security and Anthony Mothae Maruping, Commissioner for Economic Affairs. They all pointed out Africa’s progress in achieving the Millennium Development Goals (MDGs) and developing a common vision for the post-2015 sustainable development agenda. In the past decade, Africa’s economies grew at a rate of 5.6 per cent on average, making it the world’s fastest growing region after East Asia.“To further accelerate this growth, African countries will need to modernize their agriculture, industrialize more, add value to their vast natural resources, innovate and create more employment opportunities especially for the youth,” said Mr. Kutesa. Addressing the challenge of inadequate infrastructure, especially energy, transportation and technology, remains critical. Access to healthcare and other basic social services is still low. And vocational training and skills development training remain inadequate. Mr. Kutesa commended the positive work of the New Partnership for Africa’s Development (NEPAD) for its huge potential to link and open up Africa for trade and investment. “There are huge transformative projects for which we must mobilize financing. The support of the UN System, the international community and continued partnership with the African countries remains instrumental,” said Mr. Kutesa. Addressing the ECOSOC today, Deputy Secretary-General Jan Eliasson reiterated the UN’s commitment to work “hand in hand” with Africa on its most pressing challenges including assisting in the response to the current unprecedented Ebola outbreak in West Africa.The UN has, among other efforts, deployed its first-ever emergency health mission–the United Nations Mission for Ebola Emergency Response (UNMEER) which is “working hard to make a different on the ground: treat the infected, preserve stability, prevent the spread of Ebola and ultimately defeat it.”The Deputy Secretary-General outlined other initiatives aimed at making a difference in Africa, specifically the Every Woman Every Child initiative which has already advanced women’s and children’s health in the region. On Energy, he said that leaders are coming together to scale up access to clean energy. And the Call to Action on Sanitation is catalysing action in providing access to toilets, which 2.5 billion people currently lack. Additionally, the Africa Climate-Smart Agriculture Alliance will help ensure that increased productivity and food security go hand-in-hand with decreased carbon emissions for nearly 25 million farming households by 2025. On a regional level, the UN will continue to support the Economic Commission for Africa which is working closely with the AU to determine capacity development needs for the implementation of Agenda 2063. In the area of peace and security, Mr. Eliasson said that the UN continues to support capacity building and to develop joint policies under the several AU-UN initiatives. Here in New York, the UN continues to galvanise the support of the international community for several vulnerable countries, including Somalia, Mali and the Central African Republic (CAR).