America’s central bank is expected to hike interest rates by 25 basis points to 2.25% today.
However, the Fed is likely to be concerned about the intensity of the US-China trade war, which saw tariffs on $260 billion worth of goods come into effect on Monday. While the inflationary impacts of such a move are minimal, rate hikes in the medium-term remain uncertain.
The latest round of tariffs have economists keeping vigil; some are fearing the first negative jobs figures will come in November, while others expect slower growth in 2019 due in part to the trade war with China. Given the White House’s threats of more retaliatory tariffs and Beijing’s threatening to increase red-tape for American businesses in China, there is no sign of an end to the dispute. Expect the Fed to increasingly frown upon the ongoing US-China trade war in medium-term forecasts.
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John is a Senior Analyst with an interest in Indo-Pacific geopolitics. Master of International Relations (Australian National University) graduate with study focus on the Indo-Pacific. Qualified lawyer (University of Auckland, NZ) with experience in post-colonial Pacific & NZ legal systems.