WASHINGTON–The Federal Reserve will wrap up two days of meetings today, with most analysts predicting it will not move to again raise rates.
Following recent numbers showing U.S. GDP was robust, NAFCU’s VP-research and chief economist, Curt Long, said, “Government spending accounted for 0.8 percentage points of overall growth, with state and local spending making up half that growth, while defense spending dominated at the federal level. Despite strong spending, core PCE inflation dropped to 2.4% during the quarter, which is in the neighborhood of the FOMC’s 2% target. NAFCU believes that the Fed is unlikely to raise rates further unless inflation picks up, but strong economic returns will support a higher-for-longer posture.”
‘Diminished Chances’
Others agree.
Chances of a rate increase “appear to have diminished, in part, as longer bond yields have risen somewhat,” noted Forbes in its recent analysis. “Market expectations currently give a one in 10 chance of an interest rate hike in November, and statements from Fed officials in recent days have generally sounded a little more dovish, though not uniformly so.”
The current Fed Funds rate is a range of between 5.25% and 5.5%, up from 3.25% one year ago.
CUToday.info will have coverage of the decision.
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