Federal Reserve cautious of further rate rises

Janet_Yellen_700.jpgThe Federal Reserve is approaching any future interest rate rises cautiously, minutes of the March meeting show.

The Fed says it will pursue a slow and steady approach to rate rises, despite strong employment and spending figures coming out of the US.

The documents hint that the Fed will raise rates a further two times this year, rather than the four times that had initially been predicted.

However, some investors are cautious of an impending recession in the US, with JP Morgan chief market strategist Stephanie Flanders recently warning that a failure for US consumer spending and services numbers to pick up could result in an increased chance of recession.

Flanders says the only engine for the recovery in developed markets will continue to be consumption.

She says: “The story around consumption growth being key for recovery is still in place.”