Fed Interest Rate Decision

"Wall Street on hold before US rate decision"

Mar 15, 18:00 GMT: The markets are bracing for impact as an increase in interest rates is a matter of when not if, and by how much. The upsurge in the US economy, greater than expected job placements and a decrease in unemployment rates are all factors that contributing to an imminent Fed rate hike, however the rate hike is not ideal for all consumers and investors.

Whilst savers will almost certainly benefit from a higher interest rate on their savings, the cost of borrowing will increase and spending will likely decrease, evidently, this can have an immediate and negative impact on many industries such as leisure, entertainment and borrowing. Hiring and expansion plans may be put on hold, and stock controls will be more tightly managed as they are funded by debt, and the cost of being in debt will increase with higher interest rates.

Overall, the interest rate decision is based not only on employment, but on the US economy as a whole, however the Fed must get the increase figure 100% right in order not to have a negative effect on the currently booming economy.

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