Speaking on Wednesday, the chair of the United States Federal Reserve, Janet Yellen, was cautious when commenting about the possibility of future interest rate rises in the US. In December last year, the Federal Reserve raised interest rates by 0.25 per cent, however since then volatility in Asia has led to conditions that are less conducive to a tightening of financial policy. Whilst Ms Yellen made no firm comments on the timescale for when the next rate hike would occur, the inference was that it would not occur at the Federal Reserves March meeting and that it may not occur for the remainder of 2016.
The latest economic figures from the US place growth at 0.7 per cent, compared with 2 per cent last year. Despite this drop in growth, the latest round of jobs data reported that the unemployment rate fell below 5 per cent, providing some positive news. Volatility in the Asian markets has spilled over onto the US stock markets, with tumbling oil prices amongst other factors causing the S&P to fall by more than 9 per cent since the beginning of the year. Whilst Yellen admitted the effect that the Chinese economy has had on the US, she was confident that eventually the Chinese economy would level out, allowing the US market to return growth figures which it was experiencing in the previous year.