Tomorrow, America’s central bank, the Federal Reserve, is poised to raise interest rates for the second time this year, despite jobs numbers disappointing and inflation remaining below target. According to TheStar article on Monday (12 June), the recent soft numbers coming from the economy may have weakened the case for an increase in the benchmark US lending rate.

Last month, the central bank left rates unchanged at between 0.75% and 1.0% and policymakers said they would wait for further evidence that would support another rate hike. Within the same announcement, policymakers also said that the first-quarter sluggishness was “likely to be transitory” and that a rate hike would be appropriate “soon”.

Employment and inflation US average job creation between March and May was down 40% from the prior three months. This shows clear signs of flagging job growth and a shrinking work force. Meanwhile, inflation moved even further from the Fed’s 2% target in April. Given the weak data, the Fed still believes that inflation will stabilize at 2% in the medium term.