A key question in the US election is whether the election-year bounce will translate into higher interest rates and higher inflation.
The answer is: Yes, the US dollar will fall.
And the US economy is heading for a painful reckoning as inflation reaches a new high.
The key takeaway is that the US has entered the next stage of its post-war recovery.
The economy is rebounding strongly and has added jobs, but it will take time to see the full benefits.
Inflation is forecast to average 4.6 per cent next year, up from 3.5 per cent in 2018.
It’s not just that inflation has risen sharply in the past year.
It has also grown more slowly than economists expected, and is still below the inflation-targeting 2.5 to 2.8 per cent mark it hit in early 2016.
The Fed, which has not lowered interest rates in months, has kept the interest rate on overnight lending at 0.75 per cent.
But that won’t last long, as the Fed will be forced to raise rates at least twice in 2017, when the economy’s growth picks up.
“We have to have a very careful approach to the policy,” Janet Yellen, the Fed’s chairman, told reporters at a news conference on Wednesday.
It is still too early to predict when the Fed might raise rates, but the likelihood of them soon increases as the market for long-term Treasuries, US government debt and other assets, gets bigger.
The market is betting on a more gradual, but perhaps gradual, rate increase in coming months.
That would put pressure on the Federal Reserve to raise interest rates sooner than previously thought, which would mean a higher unemployment rate and a recession.
But economists say the longer the economy is still recovering, the more important the economy will be to the Fed.
“The Fed should start raising rates in March or April and wait for the economy to start picking up,” said Dan Regan, a senior economist at TD Ameritrade.
“The Fed will then have to react in the next six months to keep inflation under control.”
The economy has been recovering slowly since the end of 2016, and its growth is likely to slow.
As inflation falls, people are spending less.
That will have a huge impact on wages and inflation, especially for those who earn less than $20,000 a year.
The dollar is also becoming more expensive in foreign markets, which will further push up inflation.
People will be reluctant to spend more, which means there will be less money to spend.
That could lead to a more severe recession in the future, which could cause unemployment to rise further.
Meanwhile, some people are still not making enough money.
As inflation falls and the US unemployment rate starts to rise, there will also be less income available to buy things, which in turn will push up prices.
That means there are fewer people in the economy who can spend their way to a better life.
The Federal Reserve is expected to raise its benchmark interest rate in late May, which is expected at least in part to help to boost the economy.
The Fed’s interest-rate hikes tend to be more gradual than those of major central banks, and the Fed usually starts raising rates only when inflation rises above its target.
Inflation is also expected to rise in the second half of next year.
Fed policy makers are already predicting a rate hike in June.
But the Fed is not expected to act quickly, as there is no consensus on what it wants to do with interest rates, which have been low for years.
In the meantime, the Federal Deposit Insurance Corp. is now the primary regulator of bank lending.
It will decide what to do if the economy starts to pick up.
That decision will have far-reaching implications for financial markets, as it could decide that banks are not really as safe as they once were, and that banks need to be insured against any risks of a recession or financial crisis.
With unemployment rising and inflation rising, there are some risks that the Fed won’t act quickly enough.
That will make it more difficult for the Federal Open Market Committee to raise the Fed rate.
The FOMC meets in a secret session on Thursday, and it will have the final say on the Fed action.
So far, the markets have been mostly quiet on what the Fed could or might do.
What happens next?
The markets aren’t going to be in much of a hurry to act on the central bank’s decision.
It is already a year into the recovery.
However, the market has been preparing for the Fed to act.
Last week, the central banks’ monetary policy committees met in Washington to discuss how to respond to a rise in unemployment, and to talk about whether it would be appropriate for the FOMCs to raise their benchmark interest rates.
Most of the discussions on Thursday focused on the possibility of a rate increase