Federal Reserve to return interest rates to a normal level

Federal Reserve to return interest rates to a normal level

A gradual return of the interest rates to normalcy is expected in the next couple of years says top Federal Reserve officials. According to him, the Federal Reserve is already on the way to ensure that the interest rates are maintained in between 3 and 3.5%.

John Williams, the Federal Reserve Bank President, San Francisco said that the improvement in the labor market caused an increase in the rates on December 15. He further added that it would be sensible if the rates increased gradually although the hike in economic data will determine the rates.

Williams said that although the domestic demand is solid, it is the weakness in exports and manufacturing division that is causing the imbalance in interest rates. The US has a weak export base abroad, particularly in China that has affected its interest rates.

Berkshire Hathaway Inc (N:BRKa) to start buying Phillips 66 (NYSE:PSX) stock

The Warren Buffet conglomerate’s enterprise Berkshire Hathaway Inc (N:BRKa) started buying Phillips 66 (NYSE:PSX) stock and invested around $832 million in January for boosting its stake. However, the profit margins of the oil refining company continued to be marginal. In its first purchase of the Phillips 66 shares after January 14, Berkshire made a payment of around $198 million.

In total, Berkshire bought 10.81 shares, which made it the owner of roughly 13.7 % stake in the Phillips 66 company. At present, the Houston-based company is the sixth-largest stock holder of Berkshire according to regulatory filings.

Things to look out for this week.

The oil prices hiked to 3-week highs as Russia declared its intention to cooperate in the reduction of production so that the largest oversupply problem in decades can be tackled. The Federal Reserve’s statement of increasing interest rates was considered a bit dovish as trade analysts were concerned whether the Fed can continue raising interest rates when the market is unstable.

The U.S markets are expected to open higher this week.