Changes are not expected in the Fed’s plan to raise interest rates in the very near future.
Fed Chair Janet Yellen will point to some progress in raising employment and lowering inflation when she meets today to discuss the economy’s progress. The U.S. Federal Reserve will probably maintain its policy tightening which has had some success in overcoming near stagnant performance since the beginning of the year but put off a rate increase until the year’s end.
Yellin will speak at 1 p.m. ET to the Greater Providence Chamber of Commerce. Due to the upcoming Memorial Day weekend, trading volumes are expected to be sluggish but Yellen’s speech is highly anticipated.
“Yellen's always important, especially after the headlines in the newspaper, which are powerful, saying that June is off the table," said Bank of Tokyo-Mitsubishi chief financial economist Chris Rupkey.
CPI Remains Steady
The consumer price index is released at 8:30 a.m. ET, and is expected to show a 0.1 percent gain on the headline, or 0.2 percent, without food or energy. If this holds true, it would be the fourth straight month at this level.
"I'm pretty bearish on interest rates, and certainly would like to see lift-off early and rates higher. I'm afraid for this number tomorrow. It might be in the dove's camp. It might be 0.1," said Rupkey.
Yellen won’t surprise anyone with the continuation of her stand offish policy which has been implemented up to now.
"I wouldn't be totally shocked if the Fed (raised rates by) 25 basis points either in September or December, and then just held there for a while to see what happens," said Alan Blinder, an economics professor at Princeton University and former Vice Fed Chair.