US election unlikely to affect Fed's policy: Economists

ANKARA

A senior economist at a major US investment bank predicted on Friday that the Fed would continue ultra-loose monetary policy regardless of the election results.

"We expect real GDP growth to moderate to 4.2% in Q4 from 33.1% in Q3," said Berenberg Americas' chief Asia economist Mickey Levy.

Pointing out that the current Fed chair Jerome Powell's term would end in February 2022, Levy told Anadolu Agency: "Growth will return to the pre-pandemic level by this time and the Fed may consider a suitable monetary policy in a normal economy."

Meanwhile, Rabobank Senior US Strategist Philip Marey said the votes were still being counted and that the Democrats seemed to have a majority in the House of Representatives and the Republicans in the Senate.

This means that we should not expect major fiscal policy measures, at least until 2022, he added.

He said the two parties only come together in times of major economic downturns, adding: "This means that as long as there is no emergency, the Fed will be on its own supporting the economic recovery."

The US Federal Reserve kept its benchmark interest rate unchanged Thursday at 0.25% in its first scheduled meeting after the US election.

In a statement, it emphasized that it was determined to use all its tools to support the US economy amid the economic fallout caused by the novel coronavirus to promote maximum employment and price stability.