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I M F : Global I R Must Rise While Credit Tightens

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IMF: More Fed rate hikes may be needed

Mon May 22, 2006 7:03 AM ET

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VIENNA (Reuters) - The Federal Reserve may need to continue raising interest rates depending upon how economic conditions evolve in the United States, International Monetary Fund chief Rodrigo Rato said on Monday.
Generally he said the
withdrawal of stimulative monetary conditions
globally is a "healthy movement"
especially given that inflationary risks are to the upside. But central banks need to time moves based upon conditions in their own regions.
The end of monetary stimulation by all three of the world's major central banks -- the Fed, the ECB and the BOJ -- and fears that mounting inflationary pressures worldwide may require more aggressive rate tightening has unsettled global financial markets in recent weeks.
Key stocks indices in the United States, Europe and Japan have fallen from their late April to early May peaks, shedding at least five percent in value. Buoyant commodities also have gone into retreat, and the U.S. dollar dropped.

The reason why rates are already rising in the UK -- its the removal of liquidity by the creditor nations--Japan. The average borrower remains blissfully ingnorant of what is coming despite Mervyn King's warnings last week that they are overextended and that the level of debt was "worrying."

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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