The US central bank took its foot off the gas in October and decided to put an end to QE. We could easily state that, at the moment, the United States economy is standing on its own two feet without any monetary injections from the Fed.
Although that is true, we cannot forget that the Federal Reserve is doing a lot behind the scenes to further stimulate the economy. Think of the historically low interest rates that benefit a large part of corporate America, for example.
Analysts and market watchers have lost their way a little bit. Most analysts counted on the fact, namely, that interest rates would have already been raised this year. We have now reached the end of 2014 and we can clearly state that no increase has been made.
Will The Fed Raise Interest Rates?
The expectations for next year with regards to raising interest rates are a bit random. This is mostly related to the fact that the United States Federal Reserve is not being very clear in its communication about what is to be expected and when.
The Fed president, Janet Yellen, stated recently that the central bank has no clear guidance or timeframe for raising interest rates. It could be a number of different factors that come together to inspire the decision to raise interest rates. In other words, we are not there yet.