US expected to hold rates this week

Apr 25, 2016 (LBO) – The U.S Federal Reserve is widely expected to hold interest rates when its policy makers meet this week.

More important than the actual rate decision at this week’s (26th-27th) Fed meeting will be the language of the policy statement, analysts say.

“The market for Fed funds futures seems to be assigning a low probability to an interest rate hike,” a Reuters report said.

US Fed chair Janet Yellen had spoken extensively about global risks after the previous policy meeting and it remains to be seen whether she signals that these risks have receded somewhat in recent weeks.

The Fed raised its policy interest rate last December for the first time in a decade when market volatility finally subsided in the wake of a scare over China’s economy.

The Fed meeting will be flanked by similar policy meetings in Europe and Japan.

The European Central Bank promised last week to keep monetary policy loose while a meeting of the Bank of Japan is expected to do the same.

This should provide some relief to the financial markets that have regained some of the ground lost earlier in the year, the report said.