Federal reserve maintains interest rates 11th Dec 2019

Key indicators

  • Business investments slowed
  • Manufacturing has slowed
  • Exports has slowed
  • Unemployment rate remains at historical low

Employment rate

  • Wage increases of 3.7% observed at non supervisory production sectors.
  • Flexible deployment of jobs to low cost areas remains a strong downwards pressure.
  • Correlation between inflation and unemployment is at 0.1

Repo market concerns

  • Repo markets issue being looked into. Reviewing regulations that are hindering repo market operations by major banks
  • Will meanwhile continue purchase of treasury bills to provide necessary liquidity

Key long term deflationary pressure on the world economy

  • Automation
  • Globalization versus trade inhibiting government policies
  • Aging population

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