IMF and the World Bank have encouraged the Fed to hold off rate increases until 2016

The Fed will raising safe haven currency USD interest rates, but when....  analysts believe the Federal Reserve will want to see more when it meets in the coming week to again weigh hiking interest rates.

This week The Federal Open Market Committee meets on monetary policy on Tuesday and Wednesday, it expected to be announcing a rise in its benchmark federal funds rate.

The safe haven currency USD interest rates has sat at an extraordinarily low zero percent since 2008 on sub prime mortgage crisis, in an effort to rebuild the US economy from the Great Recession with a flood of cheap dollars.

Meanwhile, Persistent underemployment, extremely low inflation and weak wage growth has kept the rate in place, with the Fed worried the economy could still be vulnerable to tighter monetary conditions, six years after the recession ended.

Construction sector may help to building the good financial economic conditions, The surprise economic contraction of the first quarter put any action on hold, though the FOMC has said that it views the causes of the stall of the past few months as "transitory."

Analysts reading the economic data Since April, though, key data which the FOMC looks at to decide whether the economy can handle higher rates -- inflation, employment and  wages -- have all shown signs of improvement, good pace of financial improvement,

The Fed Chair Janet Yellen has repeatedly stressed the need for signs of firm tightening in the jobs market, even if inflation stays low.

Latest US jobs data Released on June 5, the May job creation report was surprisingly strong, with the jobs market absorbing a surge of returnees, and inline with the wages turning up at the same time, all signs of tightening. All time high for Dow Jones, as reported before the economic Data this week backed that up: job vacancies rose and employers said they are and expect to be paying people more and needs some more positive data

But the other US economic data is mixed. Consumer spending has risen, but mainly on cars; otherwise, US shoppers seem very cautious. consumer prices are weaker than the Fed -- which wants to see inflation around two percent -- favors. 

Most Analysts say that because the FOMC needs to see steady improvement over time, it will likely wait a couple months more to move, even if Fed policy-makers seem anxious to get past the initial increase.

This mid year decisions is on June and become more important, "The June FOMC (policy) statement will largely be a placeholder for what we continue to believe will be a September rate hike," said Deutsche Bank Friday.

"A June rate hike is not entirely off the table, but is highly unlikely. September is more likely, but that first hike is data-dependent," said economists at IHS.

When it Does The Federal Reserve raising safe haven currency USD interest rates, it will likely be the first in a series of increases aiming to "normalize" US monetary policy, the Fed says.

That economic prospect has driven volatility in global markets for two years now, pushing the safe haven currency USD higher and spurring capital flows out from emerging markets, which has left many struggling to shore up growth.

Partly for that reason, in the past two weeks both the International Monetary Fund and the World Bank have encouraged the Fed to hold off rate increases until 2016

Source: AFP