Interest Rate Question - What’s The Fed’s Next Move?
All eyes are on the Fed as the Federal Open Market Committee (FOMC) meets to establish interest rates for the first time this year.
Sentiment on Wall Street is rates will hold steady, but the Fed is concerned about positive economic indicators that may reflect inflation in the economy. By raising interest rates, the Fed attempts to control inflation.
Recent gains on the stock market are one such positive indicator. Additionally, the latest consumer confidence report came in higher than forecast.
The current FOMC meeting is scheduled for two days, one of several two day meeting scheduled this year. The rate decision is expected tomorrow afternoon. Besides the rate decision, analysts also consider the statement released with the rates. The statement provides clues
about future rate movement. Previous Fed Chair Alan Greenspan was famous for muddled, unclear statements while current Chairman Ben Bernanke is more direct.
I’ll have the rate decision posted as soon as possible. Stay tuned.