KUALA LUMPUR: Multiple sources in the United States seem to indicate that in the short to medium term , the Federal Reserve is unlikely to lower the interest rates with which it lends to major financial institutions. This is primarily due to the mainstream observation within the Fed that the inflation rate in the US has not yet fallen to the Fed's desired target of around 2 percent.
This increases the circulation of money in the open market, boosting demand for goods and services, and the overall economy flourishes thus, at least in theory. However, the inevitable cost of this lowered interest rate is that many businesses may take opportunistic or speculative advantage by raising the prices of their goods and services, leading to persistently high inflation rates for the economy concerned.