The US Federal Reserve has signaled that historically low interest rates implemented in 2008 at the height of the economic crisis might be coming to an end. US markets jumped on the news of this possibility. This comes after months of impressive jobs growth, with the unemployment rate falling from 5.7 per cent to 5.5 per cent in February 2015.
Despite the good news in the labour market, there were disappointing news from the retail market. The US retail sales fell for the third straight month in February. This has called economists to ask for a cautious rise in interest rates. While not on this point, the US Federal Reserve has said that it will not raise interest rates until inflation prospects pick up and a ‘further improvement in the labor market’ was seen.