The Federal Reserve concludes its two-day policy meeting Wednesday. Here’s what to expect.
The Fed won't be tinkering with its key funds rate, which sets what banks charge each other for overnight lending but also spills over into many forms of consumer debt.era, the Fed doesn't like to buck markets, especially when anticipation is running so strongly in one direction. The funds rate is a lock to stay in its current target range of 5.25%-5.
"I think that they will keep that bias towards higher rates in there and indicate that they are willing to raise the funds rate further if the data start to show that either inflation is not slowing as they expect it to, or if the labor market remains too tight," said Gus Faucher, chief economist at PNC Financial Services Group.
"We're laying the groundwork to prepare our clients for the inflation targets we think [will] be going up," he said.Each quarter the Fed updates its Summary of Economic Projections, or the outlook for rates, inflation, GDP and unemployment. Think of the SEP as the Fed laying a trail of policy breadcrumbs — a trail, unfortunately, that often runs astray.
Removing the word"additional," she said, would send a signal that members of the Federal Open Market Committee are at least considering that no more rate hikes will be needed.
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