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Dow Gains 618 points; Fed May Reach a Positive Level

In an interview that took place earlier this week Federal Reserve Board Chairman Jerome Powell notes that the central bank may lower the speed at which its interest rate grows. The news is favorable for investors that are affected by the growth of the global economy and volatile markets.

This may be interpreted as a sign of goodwill from the Federal Reserve, since it is pleased by the booming stock market and investors will be encouraged if it decides to suspend the initiative of slowly raising interest rates.

The fact that the Dow Jones industrial average managed to climb up by 618 to a total of 25,366 translates into an overall increase of 2.5 percent, effectively negating the loses that took place earlier in November.

The information comes a day after President Donald Trump publicly condemned the policy of the central bank, stating that it negatively affects the economy and it is more harmful than China when it comes to economics. Trumps comment is the most recent in a wave of criticism that seems to target the central bank.

Officials from the Federal Reserve have previously declared that their activities are not influenced by the political climate and there is no connection between what Powell stated and the President’s harsh criticism.

While the Federal Bank lowered rates to zero during the recent economic crisis the hard times have passed. Since 2015 it started to slowly increase the rates in order to prevent inflation and other unwanted effects.

Investors which hope that the bank will cease its plan of raising the rates for the foreseeable future will be disappointed since the next stage should take place in December and another hike may come in early 2019.

The plan is to stop the raise when the rates will reach 3%. Currently they are between 2% and 2.25%

Powell also noted that the economy will continue to grow in the next two years as unemployment and inflation rates will remain low.

By Henry R. Lares

Henry Lares is still early into his career as tech reporter but has already had his work published in many major publications including Tech Crunch and the Huffington Post.  In regards to academics, Henry earned an engineering degree from Apex Technical School. Henry has a passion for emerging technology and covers upcoming products and breakthroughs in science and tech.

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