Fed’s Caution
The US Federal Reserve’s decision to lower its benchmark interest rate to a range of 4.25-4.50 per cent marks a turning point in its monetary policy.
Hurricane Harvey, which has wreaked havoc in Texas and Louisiana in southeast US, is likely to be the most expensive weather disaster in US history, according to a report.
The total losses from Harvey would reach $190 billion or one per cent of the nation’s gross domestic product (GDP), countering the expected growth in the economy for the rest of this year, according to the report published Friday by AccuWeather, a US weather forecasting firm.
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It said the losses will impact every American and counter GDP growth, while it will likely force the Federal Reserve to postpone any interest rate changes for the rest of the year, Xinhua news agency reported.
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“The economic growth that had been predicted for the rest of this year will at least be cut in half as a result of the devastation from Hurricane Harvey,” it noted, adding that effects of the storm will ripple across the country, impacting everything from food and gas prices to shipping costs and jobs, etc.
Harvey blew ashore on August 25 as the most powerful hurricane hitting Texas in more than 50 years, displacing more than one million people and damaged some 200,000 homes in a path of destruction that stretches for more than 500 km. The Houston area has been devastated by severe flooding, after receiving 1.4 m of rain.
Joel N. Myers, president of AccuWeather, said that as the disaster continues and the extent of human suffering will only increase as floodwaters and lack of electricity and basic services puts Houston into third world-like conditions for days or weeks to come.
Adding to the misery, temperatures will climb between 100 and 105 degrees Fahrenheit in the next few days, Myers explained. Standing water may lead to disease, hazardous mold and other concerns like outbreaks of mosquitoes.
“This will be the costliest and worst natural disaster in American history,” he said.
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