Federal Reserve interest rate hike guessing game

The Federal Reserve meets in the upcoming week, and the interest rate guessing game is at full swing. The consensus is clearly that the stock market woes during the early part of the year mean the Fed will postpone an interest rate hike, as an article in The New York Times explained on Sunday.

The Fed is not likely to increase rates in the week, but the steady growth of the domestic economy – regardless of the wobbles of financial markets as well as the weakness of other developed nations – is strengthening the hand of officials who say that higher rates are necessary to maintain control of price inflation.
The challenge now confronting Janet Yellen, the Fed’s chairwoman, is forging a consensus among Fed officials about how soon to resume the march begun in December, when the Fed raised rates, by 0.25%, for the first time since the financial crisis.

One of the biggest stories a week ago was the news that hackers stole $100 million from the Bangladesh Bank’s account in the Federal Reserve Bank of New York. The audacious breach, which took place February, actually sought to steal $1 billion from the account, but a typo in the name of the receiving entity raised warning flags in the transfer process.In the latest wrinkle, Bangladesh’s finance minister said Sunday that the Bangladesh Bank had not even informed him of the heist. From Bloomberg:

Abul Maal Abdul Muhith, the finance minister, told reporters in Dhaka on Sunday that he was going to meet Prime Minister Sheikh Hasina and planned to issue a statement on the matter, which involved the unauthorized transfer of at least $100 million from the central bank’s account with the New York Fed.

“I will certainly take some action against Bangladesh Bank,” Muhith said, without elaborating. “Bangladesh Bank has the audacity not to inform me.”

The NY Fed hack is just the latest in a series of high-profile security breaches, and reinforces the threat that financial companies are facing.

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