The correct monetary policy in the U.S. benefits the Caribbean

Janet Yellen said today that she expects moderate growth in the economy over the next one or two years and that the performance of the labor markets will weigh significantly on whether and when to raise rates. The consensus for Friday’s job report is one where an excess of 200,000 jobs added in the month of November is expected.

The Federal Reserve’s inflation target is still two percent but for rate increases the Federal Reserve is expected to keep the fed funds rate below normal while accommodating the financial markets with asset purchases.

The Caribbean is impacted by the American economy because of the region’s dependence on trade with the United States. Europe is going the opposite way when it comes to its deposit rates which are in the negative. Banks are paying the European Central Bank to keep their deposits basically.

Europe’s economic performance is important to the Eastern Caribbean as Cuba eventually ramps up its tourist industry. Also, as the Caribbean pursues energy policies that integrate alternative fuel sources into its grid, it will need private sector investment from Europe, Asia, and the United States.

The economic performance of the United States is important to growth and investment in the Caribbean. Businesses and policymakers in the Caribbean should advocate for the best growth policies for its neighbor to the north.

The correct monetary policy in the U.S. benefits the Caribbean