MTS Help Center

Fed’s Fischer warns of the dangers of low rates

Federal Reserve Vice Chairman Stanley Fischer on Monday warned of the dangers of low rates.

In prepared remarks for a speech at the Economic Club of New York, Fischer suggested that low rates can lead to longer and deeper recessions, making the economy more vulnerable.

He added they can also threaten financial stability, although the evidence so far doesn't show a heightened threat of instability.

Fischer said the central bank has a limited ability to combat recessions because it does not control all the factors leading to depressed rates.

"We are very close to our targets" of full employment and 2-percent inflation, said Stanley Fischer. "So we're not in deep trouble with monetary policy at the moment," he responded when asked about the concept of raising the Fed's inflation target.

Oil ends lower on U.S. trade spike; shale decline limits losses

Oil prices settled down on Monday, weighed by oversupply concerns, with a spike in trade volume driving U.S prices below $50, but losses were limited amid a projected drop in American shale output.

Trades in U.S. crude futures contracts soared to 12,932 barrels during the minute of 9:35 a.m. EDT (1335 GMT), the highest since Oct. 13, as traders sold off contracts ahead of their Oct. 20 expiry date.

Prices rose slightly in the afternoon, as U.S. Energy Information Administration (EIA) showed shale oil production was expected to fall by 30,000 barrels per day (bdp) in November.

U.S. West Texas Intermediate (WTI) closed at $49.94 per barrel, down 41 cents, or 0.8 percent, after hitting a session low of $49.47.

Dollar Drops as Traders See Fed Taking It Slow on Rate Increases

The dollar fell from its highest level in seven months on speculation that the Federal Reserve will maintain a go-slow pace of raising interest rates even if the central bank tightens policy later this year.

The U.S. currency weakened against most of its major peers as Fed Vice Chairman Stanley Fischer outlined factors holding down growth and interest rates in a speech in New York Monday. Fed Chair Janet Yellen on Oct. 14 outlined the argument for keeping monetary policy easy without taking an interest-rate hike off the table this year, potentially dimming the greenback’s allure.

Bloomberg’s Dollar Spot Index, which tracks the currency against 10 major peers, dropped 0.3 percent as of 5 p.m. New York time. It touched a seven-month high on Oct. 13. The greenback fell 0.3 percent to $1.1000 per euro and was 0.3 percent lower at 103.89 yen.