Fed Closer to Raising Interest Rates
Yesterday, the Federal Reserve’s Federal Open Market Committee (FOMC) released a statement and revised economic projections after two days of meetings beginning on March 17, 2015. In the much-anticipated statement, the FOMC indicated that they would no longer be “patient” in assessing whether to raise short-term interest rates, but would still proceed with caution. The FOMC will consider raising interest rates later this year. According to the statement, however, “the Committee judges that an increase in the target range for the federal funds rate remains unlikely at the April FOMC meeting.”
The Federal Reserve’s economic projections forecast gross domestic product to slowly increase in 2015 and 2016, by 2.3 to 2.7 percent. Unemployment is also expected to improve ranging from 5.2 to 4.9 percent through 2016.
Despite the announcement that the interest rate increases are likely just around the corner and somewhat negative rhetoric from the FOMC statement, the market responded positively yesterday, but is down this morning.
- FOMC Statement: http://www.federalreserve.gov/newsevents/press/monetary/20150318a.htm
- Federal Reserve Projections: http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20150318.pdf