FOMC Wraps Up Meeting Today; No Rate Move Expected

WASHINGTON—The Federal Open Market Committee today will wrap up its two-day meeting—its first meeting since increasing the federal funds target rate by a quarter point in December.
 
NAFCU Chief Economist and Director of Research Curt Long said he does not expect another rate increase this month.
 
"We expect the FOMC will make no change in the federal funds target rate during this week’s meeting,” said Long. “Weakness and volatility in the stock market combined with a lack of inflationary pressure will likely give the committee pause before it takes the next step in normalizing rates.”
 
The FOMC raised the federal funds target rate to a range of 0.25% to 0.5% in December. The FOMC has forecast four rate hikes in 2016 and four more in 2017 – but Long has said the actual pace of normalization will depend on the future performance of the economy and inflation.
 
NAFCU stated that the futures markets have placed a 35% probability on a March increase and a 65% probability on no increase in March.