By Robert Carry
The US Federal Reserve will not raise interest rates this week as the country's economic recovery is yet to gather pace, AMP Capital has predicted.
According to Dr Shane Oliver, head of investment strategy and chief economist at AMP, the US Federal Reserve will most likely leave interest rates on hold near zero when it meets next week.
However, Oliver believes comments emerging from the group will be closely watched. "The big focus will be on whether it softens its assessment that monetary policy can remain exceptionally easy for an 'extended period'," he said.
Oliver continued, "While there has been some talk that the Fed will signal a less dovish stance, our assessment is that it won't given the uncertainty about the strength of the US recovery and the amount of slack in the US economy."
Both the European Central Bank and the Bank of England meanwhile, are also expected to leave interest rates on hold following their interest rate setting meetings.
The US is also bracing for the release of a range of data studies, which will indicate the rate of economic recovery through home sales, the ISM and payrolls. The AMP expects US job losses to slow to 150,000 in October, but predicts unemployment will still top 10%.
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