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Fed describes the economy as 'Strong' for the first time since 2006

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• The American central bank is quite optimistic about the economic outlook. Last Wednesday, the Fed decided, in line with expectations, to keep the interest rate unchanged. Nevertheless, there is a huge chance that a new rate hike will be implemented in September.

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• In the FOMC statement, the Fed described the US economy as 'Strong' (graph: Bloomberg). And that was the first time since May 2006 that the American central bank used this word again. And it was precisely at that time that the economy was in the final stage, shortly before the housing market began to show tears.

A new interest rate increase is close

 

• In the FOMC statement, the Fed also stated that the plan remains unchanged as far as interest rates are concerned. Growth prospects still look excellent and the labor market justifies higher interest rates.

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• As a result of this statement, the dollar recovered. In addition, the chance of a new interest rate increase in September increased further. At the moment, that chance is almost 90%. Everything indicates that the Fed will raise the interest rate twice this year. And there is a huge chance that the first rate hike of the two will take place during the next month.