Federal Open Market Committee Meets Today and Tomorrow
The Federal Open Market Committee (FOMC) is scheduled to meet today and tomorrow for their second policy meeting of 2017. Based on economic strength, many forecasters are predicting the first rate hike of the year will take place after this meeting. The market is already pricing in a rate hike, but no official actions have taken place.
Earlier in the month, Fed Vice Chair Stanley Fischer avoided making direct comments on monetary policy or the decision to raise interest rates. He stated, “committees and rule each have their advantages. Committees embody a wider range of information and have a capacity for innovation.” Fischer also insisted that the economy is “very complex” and may not fit forecasters’ models.
Other FOMC members have more willingly discussed the potential of a March rate hike. Fed Governor Jerome Powell said the case for an interest rate increase in March has gained support and will be on the table. Powell cited strong numbers from core inflation support a rate increase.
Fed Chair Janet Yellen also indicated that a rate hike is possible saying in a speech in Chicago, “At our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate.”
A benchmark interest rate hike impacts mortgage rates, savings accounts, the global economy and financial markets. The FOMC makes decisions regarding interest rate policy based on economic conditions like inflation and the job market. An official FOMC meeting announcement will be released on Wednesday at 2 PM EST and Fed Chair Yellen is scheduled for a press conference following the announcement at 2:30 PM EST.
Sources: CNN Money, CNBC, Reuters