FOMC Meeting: No Surprises Expectedby Tim Manni
The two-day Federal Open Market Committee (FOMC) meeting begins today, and will most likely end the way nearly every expert has predicted: no change in interest rates. The Fed’s constant concerns over inflation and a weak dollar have many investors expecting a rate increase sometime later this year. Market observers are concerned that if the Fed raises interest rates too soon it will weaken an already shaky economy, and banks will struggle even more to recover from losses suffered from the subprime mortgage and credit crises.
Inflationary concerns circle around the ever rising price of oil. According to AAA, gas prices have increased 37% in the past year. In the 12 months leading up to May, the weak dollar has led to the largest rise in import costs since 1988.