The largest Bank Association of America urged the fed to raise rates

The largest banking Association of the USA, uniting the credit institutions with total assets of $16 trillion, appealed to the Federal reserve urging them to tighten monetary policy, according to Financial Times. According to bankers, the current rates or a decrease to negative values can lead to devastating consequences.

Chief economist at the American bankers Association (ABA) James Chessen warned that the continuation of loose monetary policy creates problems for the economy. He noted that the interest on loans for a long time remain very low.

Cessen the FT said that the Association is not going to lobby for the increase of the rates, but merely describes the consequences of maintaining at a low level for a long time. He added that corporate debt has risen in the world, partly good, as it stimulates growth, but in the future it can create problems.

According to Cesena, it is unlikely that the fed will reach negative rates, at least “near future”, but the persistence of low rates signaled that the economy is in bad shape. American bankers pointed to the example of Japan, which in late January introduced a negative interest rate, and since then, parliamentarians have expressed concern that this decision will result in a reduction of savings of depositors and weaken the largest banks.

The head of the regulator Janet Yellen said in February that it admits the possibility of a rate cut to negative numbers, although it considers this development unlikely. In this regard, in the framework of the annual stress tests the fed has asked for the largest us banks to evaluate the consequences of introducing negative rates in the short term.

Economists surveyed by the FT, believe the fed will leave rates unchanged. Most of them expect that changes may occur until June. The fed has indicated that it plans a gradual increase in the key rate this year.

In December last year, the fed for the first time since 2006 raised its key interest rate by 0.25 percentage points to 0.25–0.5 percent. New data on the possible rate of increase in the rates the fed will report on March 16.

Reuters notes that the reason to keep rates unchanged may be the concern of the fed slowing global economy and new signs of inflation in the United States.

The fed statement on the policy of the regulator, coupled with economic forecasts will be released at 14:00 local time (21:00 MSK). At 14:30 (21:30 GMT) press conference, Yellen.