The low inflation will remain for most of this half or even continue to next year; therefore, the Fed will raise rates no earlier than December.

My previous prediction about the Fed has been proved to be correct partly. The Fed has decided to maintain current zero rates because of the current low inflation rate. The US economy has a low inflation due to the low energy cost. The Chairwoman Yellen describes such deflationary pressures as “small problems”, but I cannot agree with her. I think the oil price will maintain at the current level for a long period, or become even lower. It is a demand side issue that the price is dragged down by the lower demand, according to the global economic environment, especially the Chinese economy. The US economy itself is doing well with a low unemployment rate, but the market confidence is still doubtable because of exogenous factors. Low inflation rate and market confidence interact. However, I believe that the US housing market is gradually growing. Because the US economy is one of the very few economies that do not have many endogenous problems. Strong US dollar is bad for the US economy, but it can show some confidence of many investors about the US economy’s future growth. The low inflation will remain for most of this half or even continue to next year; therefore, the Fed will raise rates no earlier than December. Despite the low inflation, I think that the US economic power will remain unchallenged for some years.