FOMC: No Rate Change Likelyby Tim Manni
The Federal Open Market Committee’s (FOMC) one-day meeting today will likely result in no change to interest rates. Market observers widely expect a change in rates to come either later this year or next.
“The Fed’s preference would be to raise rates as soon as possible,” said Keith Gumbinger, HSH Vice President. To remain impartial, the Fed is not likely to take any action at their October meeting, just prior to the presidential election. Keep in mind that the Fed doesn’t need to wait for a scheduled FOMC meeting to change rates; they did it earlier this year, and could do so again at any time if market conditions require it.
For the last couple of months, the Fed has been juggling the idea of raising interest rates to stem inflation, help stabilize our financial system, and aid the struggling economy. A recent decline in oil prices and a weak labor market have quelled inflation to a point where the Fed has delayed increasing rates to correct surging prices.
The FOMC will meet three more times before the year is out. A presidential election smack in between will make things interesting. We’ll keep you updated.