U.S. officials said Wednesday that they expect the Federal Reserve to cut rates as much as one-quarter of a percentage point in September to help boost the economy and spur economic growth.
The Fed will announce the decision at a meeting later in the week, the officials said in a statement.
The move could give the Fed more room to lower rates as the economy slows and inflation pressures rise, but it would also be a significant boost to the broader economy, which is already benefiting from the strong dollar and the lower cost of gasoline.
The U.K. central bank last month cut its key interest rate by a quarter of a point and the Bank of Japan raised it by one-fifth.
The Fed’s decision to lower the interest rate could help the U.B.C. economy by easing some of the pressure on inflation, said Matthew Yglesias, an economist at the University of Chicago.
It also would help the rest of the world.
In the U!
S., the move would also boost growth, especially as the recovery continues, Ygleias said.
There are concerns that the U-turn will hurt economic growth in the short term, particularly for those who rely on food stamps.
But Yglinas said the Fed’s move would help stabilize the U.-Beltway economy, as the Fed and the Federal Open Market Committee (FOMC) would take steps to prevent an economic crisis.
Read more: The dollar fell to a seven-week low on Wednesday, as investors awaited the Fed decision. “
That’s a very important message for the global economy and that is what the Fed has said is what is best for the world and that’s what is necessary for the recovery.”
Read more: The dollar fell to a seven-week low on Wednesday, as investors awaited the Fed decision.
The greenback rose to 74.70 yen, or about 70 cents, from 75.30 yen on Wednesday.
Spot gold, the metal that’s used to buy goods and services, was up 0.2 percent at $1,268.55 an ounce.
Gold prices have been surging since early July, when the Federal Bureau of Investigation said that Russia was behind a cyberattack that took advantage of a computer bug in the U’s central bank.
Last week, gold gained more than 6 percent to $1k an ounce, the highest gain in a week, amid hopes that the Fed would be willing to hike interest rates.
With the Fed meeting at a time when the global financial system is in a tailspin, the dollar’s weakness is a serious blow to the global economic recovery, Ygbelsias said in an interview.
A strong dollar can have an impact on imports and other industries that rely on a strong currency, he said.
But it can also create opportunities for investors to get out of bonds and into the gold market.
As the Fed moves to lower its key rate, gold will benefit from the Fed easing its monetary policy and helping the rest and other countries with a weak currency, said Robert Hall, head of commodities at Bank of America Merrill Lynch.
Read the Fed statement: Read More: It’s a good signal to the world that the economy is on a positive path, Ygglesias said, but the Fed will need to do more to boost growth and reduce the risk of a crisis.