The question of a Fed rate hike remains in the air in Washington. Federal Reserve Chairwoman Janet Yellen and most of her partners continue to contend that the increase will take place some time before the end of the year and markets worldwide will be watching closely this week’s U.S. central bank’s policy meeting for signs of some decision.
Yellen strongly believes that the indicators are just not there. Since June, unemployment has been low and spending high and after this week’s meeting on Tuesday and Wednesday, the Fed is left with only four more opportunities to make a move. Fed meetings are scheduled to take place in July, September, October and December.
The decision to raise interest rates this year is almost unanimous among Fed officials and according to Kevin Logan, chief U.S. economist at HSBC, this will most probably take place as planned.
Follow the Dots
Following this week’s 2 days of talks, the Fed will issue some updated economic forecasts with what they are referring to as a “dot plot” of the track the rates will take. A policy statement will be made at 2 p.m. and Yellin is scheduled to hold a press conference at 2:30 p.m.
Josh Shapiro, chief economist at MFR Inc., said he is focusing focus on the dots, which he believes embodies the viewpoints of the five Fed governors and the 12 district bank presidents.
“The dots, there it is in black and white. That represents information,” he said.