Analysts expect US Fed to raise rates this week

The Federal Reserve, led by Chair Janet Yellen, is widely expected to announce a hike in its target short-term interest rate, the first increase in borrowing costs since 2006, at the conclusion of its two-day monetary-review meeting. Phil Shaw, chief United Kingdom economist at fund manager Investec, said it was nearly certain the Fed would raise rates, but the question for markets was whether Yellen would signal further rate rises over the coming months. In an economic letter entitled, “Why Are Interest Rates So Low?”, economists Marco Del Negro et al argue that the natural interest rates are lower due to continued cautious behavior from firms and households following the 2008 recession.