TechFlow News, May 6: In a report, SEI analyst Jim Smigiel stated that direct interest rate hikes are unlikely given the Federal Reserve’s dual mandate of supporting full employment and price stability, as such hikes could have potential negative impacts on the economy and labor market. Other global central banks—such as the European Central Bank—are not formally assigned a dual mandate and thus may focus more intensely on price stability, making rate hikes more likely in those regions. However, global central banks are expected to broadly follow the Fed’s lead, as significant deviations from the Fed’s interest rate path could destabilize foreign exchange rates and capital markets elsewhere. (Jinshi)
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