Placeholder Image

Subtitles section Play video

  • The clock is ticking for the Federal Reserve.

  • The US Central Bank is considering increasing interest rates because the economy has strengthened and Central Bank has believed,

  • there is a growing risk that inflation may eventually get out of control.

  • Currently interest rates are near zero and FED officials have stressed that the first increase would be small and following ones, gradual.

  • The rate high would be the first since the 2008 financial crisis,

  • and it may pave the way for the Bank of England to go the same way.

  • However, all the central banks in the Euro Zone, Japan, and China are unlikely to raise rates for quite some time,

  • meaning that the year of cheap money globally is not completely over yet.

  • Were the FED to hike rates, US consumers and businesses would face higher borrowing costs on their loans.

  • The value of the dollar would rise as more investors would put money in the US chasing higher returns.

  • This matters for companies around the world that have borrowed in dollars, as they will find these loans harder to repay.

  • Then there is the question of the how financial markets would react, some fear there may be wide-spread panic,

  • one thing that the FED exactly has been trying to avoid.

The clock is ticking for the Federal Reserve.

Subtitles and vocabulary

Click the word to look it up Click the word to find further inforamtion about it

B1 UK FinancialTimes bank central bank central interest financial

When interest rates will rise explained | FT World

  • 46 7
    Reina posted on 2015/09/15
Video vocabulary