After months of silence, the Federal Reserve is finally set to make its next move on interest rates. The central bank’s meeting in late September will be one of the most closely watched events in financial markets this year, as investors try to figure out whether or not growth will accelerate as we move through 2019 and 2020. That’s why there’s still some uncertainty over whether or not the Fed will raise rates by another quarter percentage point at its meeting in late September but markets are equally uncertain if it will continue to tighten monetary policy if it believes that inflation remains contained.
The Federal Reserve’s interest rate decision will be one of the most closely watched events in financial markets this year.
The Federal Reserve’s interest rate decision will be one of the most closely watched events in financial markets this year.
The Fed has raised its benchmark federal funds target range to 1.5% to 1.75% since December 2015, but it has also signaled that three-quarter point increases are possible later this month and next year.
The central bank’s next policy meeting takes place on Wednesday, September 25, and is expected by many analysts a hike at that time after other members said they would vote for one the week before.
What is more important, though, is whether investors believe that growth will accelerate as we move through 2019 and 2020.
What is more important, though, is whether investors believe that growth will accelerate as we move through 2019 and 2020. In this regard, I think that the data suggests that it should be reasonably strong. For example:
- Consumer spending is expected to grow at 2 percent in 2018 and 3 percent in 2019 (the same pace as projected last fall).
- Business investment has been growing at a decent clip since late 2016 (1-2 percent) but was down slightly in December due to weather disruptions in manufacturing industries like transportation equipment manufacturing and apparel retailing. This could be a sign of slowing economic activity—but then again it might just reflect a normal cyclical adjustment given how much energy companies have invested over recent years on new plants or production capacity expansions at existing facilities; we’ll have better data when we get back from Jackson Hole next month!
That’s why there’s still some uncertainty over whether or not the Fed will raise rates by another quarter percentage point at its meeting in late September.
There’s still some uncertainty over whether or not the Fed will raise rates by another quarter percentage point at its meeting in late September. If it does, that would mark a second increase since March and put pressure on stocks as investors look for returns from their investments.
The S&P 500 has fallen about 5% so far this year, but many analysts expect things to bounce back soon.
“The market has been caught up in some temporary factors,” said Michael Linehan, managing director at Pac Investment Management Ltd., which oversees $3 billion in assets as part of its family office business.”We think there are better days ahead.”
But markets are equally uncertain if it will continue to tighten monetary policy if it believes that inflation remains contained.
The Fed is expected to raise rates at its September meeting, but investors remain uncertain about whether it will continue to tighten monetary policy if it believes that inflation remains contained.
The Federal Open Markets Committee (FOMC) meets Wednesday and Thursday of this week in Jackson Hole, Wyo. A number of Fed officials have expressed concern about the economy’s growth rate, which they see as being too low despite strong job gains and rising wages.
Investors are waiting for the Federal Reserve to make its next move on interest rates
The Federal Reserve’s Jackson Hole symposium will be held next week, and it is expected that the central bank will make a decision about raising interest rates.
The Fed has been keeping its key rate at 2% since December 2015. However, investors are watching closely for any indication of a change in policy as they wait for the Fed’s next move on interest rates.
If you want to know more about what to expect from this event and its impact on gold prices, we have some useful information below:
Conclusion
The Fed’s next move will be a critical one, and it is likely that investors will see some volatility in the markets as they wait to see what the central bank decides.