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When we analyze the financial and economic outlook, we have to look an focus on the economic

performance of the largest economy in the world, The United States. The U.S. economic outlook is
healthy according to the key economic indicators. The GDP growth rate is expected to remain between
the 2 percent to 3 percent ideal range. GDP growth will rise to 2.8 percent in 2018, 2.4 percent in 2019,
and 2.0 percent in 2020.

Unemployment is forecast to continue stable. The unemployment rate will drop to 3.6 percent in 2018,
and 3.5 percent in 2019 and 2020. That's lower than the Fed's 6.7 percent target.

The Federal Reserve raised interest rates on June and signaled that two additional increases were on the
way this year,

A hike in rates is a sign that the Fed is confident in the pace of growth of the US economy. The Fed
placed its key interest rate at 0% in December 2008 to resuscitate the collapsed real estate market. But
a little more than eight years later, the economy of the United States is in a much better state and has
grown, albeit slowly.

The simple message is that the economy is fine, "said Gerome Powell, the chairman of the
Federal Reserve. The increase in rates is a sign that the US economy no longer needs the help
of the Fed and consumers and busines can afford to pay more to borrow. It is a great
improvement since 2008, when the unemployment rate reached 10%. However, the cost of the
loans will increase. Home buyers and credit card owners shlduld be careful.

How can this affect the central bank of Krakow?

The increase in interest rates will make the cost of the new debt contracted by the bank more
expensive, but it also represents an opportunity to generate more interest income from its financial
assets.The rise in interest rates can affect the BBC because the price of fixed income assets is inversely
proportional to interest rates. However, through an adequate management of assets and liabilities, its
adverse effects can be minimized.

Bond yields are likely to rise, reflecting stronger global GDP growth and a slow winding down of central
banks’ balance sheets. Yields are unlikely to spike higher, however, due to low interest rates abroad and
low inflation. Investors should consider short to medium term, high quality bonds in order to decrease
portfolio volatility.

We can conclude that It becomes vital to carry out a good management of assets and liabilities for the
following year.

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