FOMC Review

June 15, 2016

The FOMC did not raise interest rates at its June meeting, but confidence was expressed in the released statement and in Yellen’s press conference that GDP is picking up nicely in the second quarter.  She would not rule out a hike in July.  Wages are accelerating, and the June employment data will be important.  The Brexit referendum could prove influential, too.  Projected inflation in 2016 was revised higher.  The average path of the fed funds rate among FOMC members puts such near 0.88% at end-2016, near 1.62% near end-2017 and near 2.20% at the end of 2018. Even then, the rate is seen well below its longer term equilibrium of 3.12%.

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission. 



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