THE HINDU Editorial Vocabulary- August 30, 2016- Topic 1

Preparing for the Fed rate hike

Federal Reserve Chair Janet Yellen has made clear that the U.S. central bank is preparing for its next interest rate increase AMID signs that a consumption-led expansion in the world’s largest economy is gaining TRACTION, ALBEIT at a moderate pace. While stopping short of indicating a time frame for the move, Ms. Yellen referred to the steady improvement in the domestic labour market, with expectations of both further job gains and moderate growth in real GDP, as BOLSTERING the case for the Fed to raise borrowing costs for the first time since December last.
With U.S. benchmark interest rates having HOVERED close to zero for almost a decade, some economists and central bankers, including the Reserve Bank of India’s Raghuram Rajan, have openly questioned the EFFICACY and long-term impact of “ultra-low rates” adopted widely across developed economies as part of the response to the 2008 financial crisis. Among the consequences of the easy money policies in the U.S. and the European Union, which were ACCOMPANIED by a STIMULUS in several emerging markets, was the sharp UPSURGE in liquidity and the resultant second-order effects on asset prices and inflation, and currencies and the terms of trade in the emerging economies. It is in this context that the Fed’s decision last year to EMBARK on a policy normalisation was seen as central to a gradual and welcome RESTORATION of global monetary normalcy. Ms. Yellen herself acknowledged that monetary authorities may need to consider ADOPTING additional tools in dealing with recessions and economic shocks in future as average global economic growth and interest rates move into a lower orbit than in the past.

The Fed chair’s comments also highlighted some of the risks that lie ahead for the U.S. economy. In particular, she FLAGGED the fact that business investment remains soft, and SUBDUED global demand combined with the dollar’s recent gains continues to constrain the country’s exports. U.S. economic data, including figures for consumer confidence and payrolls, due later in the week may help bring more clarity on the likely timing of the next increase in the Fed funds rate — September, as a minority of economists predict, or December, as investors ANTICIPATE. With the Federal Open Market Committee set to make its next statement on September 21 after a two-day meeting, policymakers at the RBI will have about two weeks to factor in the interest rate stance in the U.S. while deciding on domestic borrowing costs. A rate hike by the Fed will have IMPLICATIONS for the Indian currency and interest rates that the RBI must take COGNISANCE of.

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Amid: surrounded by; in the middle of.

Example: our dream home, set amid magnificent rolling countryside

synonyms: in the middle of, surrounded by, among, amongst, amidst

Traction: the action of drawing or pulling a thing over a surface, especially a road or track.

Example: a primitive vehicle used in animal traction

synonyms: grip, purchase, friction, adhesion

Albeit: although.

Example: he was making progress, albeit rather slowly

Bolstering: support or strengthen; prop up.

Example: the fall in interest rates is starting to bolster confidence

synonyms: strengthen, reinforce, boost, fortify, renew, support, sustain

Hovered: remain in one place in the air.

Example: army helicopters hovered overhead

synonyms: be suspended, be poised, hang, levitate, float, fly

Efficacy: the ability to produce a desired or intended result.

Example: there is little information on the efficacy of this treatment

synonyms: effectiveness, success, productiveness, potency, power, benefit, advantage

Accompanied: go somewhere with (someone) as a companion or escort.

Example: the two sisters were to accompany us to New York

synonyms: go with, travel with, keep someone company, tag along with

Stimulus: a thing or event that evokes a specific functional reaction in an organ or tissue.

Example: areas of the brain which respond to auditory stimuli

synonyms: Encouragement, impetus, boost

Upsurge: an upward surge in the strength or quantity of something; an increase.

Example: an upsurge in violent crime

synonyms:  rush. debris surge. flow. spate. surge

Embark: go on board a ship, aircraft, or other vehicle.

Example: he embarked for India in 1817

synonyms: board ship, go on board, go aboard, hop on, jump on

Restoration: the action of returning something to a former owner, place, or condition.

Example: the restoration of Andrew's sight

synonyms: reinstatement, reinstitution, reestablishment, reimposition, return

Adopting: legally take another's child and bring it up as one's own.

Example: there are many people eager to adopt a baby

synonyms: take as one's child, be adoptive parents to, take in, take care of

Flagged: mark (an item) for attention or treatment in a specified way.

Example: “greatfully” would be flagged as a misspelling of “gratefully.”

synonyms: indicate, identify, point out, mark, label, tag, highlight

Subdued: quiet and rather reflective or depressed.

Example: I felt strangely subdued as I drove home

synonyms:somber, downcast, sad, dejected, depressed, gloomy, despondent

Anticipate: regard as probable; expect or predict.

Example: she anticipated scorn on her return to the theater

synonyms:  expect, foresee, predict, be prepared for, bargain on, reckon on

Implications: the conclusion that can be drawn from something, although it is not explicitly stated.

Example: the implication is that no one person at the bank is responsible

synonyms: suggestion, insinuation, innuendo, hint, intimation, imputation

Cognisance: knowledge, awareness, or notice.

Example: he was deputed to bring the affair to the cognizance of the board

synonyms: Awareness, Knowledge,perception, realization