tutor2u | Why might the US raise its interest rate?

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Why might the US raise its interest rate?

Ruth Tarrant

14th December 2015

On Wednesday this week, the US Federal Reserve is widely and globally expected to raise its interest rate by one quarter of a percentage point, in its first increase since June 2006. The Economist ran an interesting leader last week on why the Fed might raise rates, effectively tightening monetary policy, taking the view that it was purely a "credibility" exercise because they had previously said that they would raise rates, rather than an example of being able to fine-tine the economy.

Ruth Tarrant

Ruth has been an enthusiastic Head of Economics and Politics for many years, having taught in a variety of schools and at university level. She is also a Senior Examiner. Ruth is passionate about boosting the quality of teaching and learning across all subjects in schools and colleges.

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