The Federal Open Market Committee has just released its monetary policy statement following its two day meeting. Significant changes in the wording of the statement suggest that the Federal Reserve is very likely to raise interest rates following its June 16-17 policy setting meeting, or at the latest its June 28-29 meeting.
The statement indicated that the Fed is unlikely to raise rates at its April 28-29 meeting.
The full Fed statement is here.
Of note, Fed officials sharply revised down their expected path of interest rates this year and next.
According to the “dot plot” that tracks where the 17 Fed officials think the target fed funds rate will be at the end of the year, the median “dot” fell from 1.125% in December to 0.625% at this meeting.
The current Fed funds target is between 0.0% and 0.25%
-RW
UPDATE
Yellen confirms during her press conference that a rate hike is possible at any meeting following the April FOMC meeting.
The FOMC spoke person of the day never speaks the truth. So rates set by FOMC are not likely to rise any time soon. During the last few weeks the market is actually suggesting rates will fall. Only time will tell.
ReplyDeleteRobert,
ReplyDeleteQ1 GDP was 0.3%. If Q2 GDP numbers come back under 1% or negative, does the FED raise rates?
Alan