No Interest Rate Hike Until November
Officials see an economy gaining strength but still fragile.
The Federal Reserve is still playing wait and see on interest rates. Nothing the policymakers are saying following the most recent meeting of the Federal Open Market Committee (FOMC) changes our view that interest rate hikes are still months away.
We look for a rate increase no sooner than the Nov. 2-3 FOMC meeting, right after Election Day. Our best guess is that hike will be followed by another quarter-point increase in December. Until then, the fed funds rate, which banks charge each other on overnight loans, will remain near zero, where it has been since December 2008. The rate is an important benchmark for many businesses and households, and the prime rate typically marches in lockstep with it.
Looking at the economy, the FOMC broke little new ground in its post-meeting statement, repeating most of its statement from January. Among the few changes, the Fed cites a labor market that is “stabilizing,” while housing construction is “flat at a depressed level.” The most widely watched language remains the same as the past several months: Referring to interest rates, the FOMC says the fed funds rate will be “exceptionally low…for an extended period.” That language at the FOMC meeting in January brought one dissenting vote, and it brought one dissent this time around, too.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
For weekly updates on topics to improve your business decisionmaking, click here.
-
7 Ways to Kick Off an Estate Planning Talk With Your ParentsIt can be hard for aging parents to discuss estate plans — and for adult kids to broach the topic. Here are seven questions to get the conversation started
-
4 Reasons Why the Dollar Remains the World HeavyweightThe dollar may have taken a beating lately, but it's unlikely to be overtaken as the leading reserve currency any time soon. What's behind its staying power?
-
The Top 10 Side Gigs For Retirees In 2026Money is freedom in retirement; here’s how to earn more of it with a profitable side gig
-
Humanoid Robots Are About to be Put to the TestThe Kiplinger Letter Robot makers are in a full-on sprint to take over factories, warehouses and homes, but lofty visions of rapid adoption are outpacing the technology’s reality.
-
Trump Reshapes Foreign PolicyThe Kiplinger Letter The President starts the new year by putting allies and adversaries on notice.
-
Congress Set for Busy WinterThe Kiplinger Letter The Letter editors review the bills Congress will decide on this year. The government funding bill is paramount, but other issues vie for lawmakers’ attention.
-
The Kiplinger Letter's 10 Forecasts for 2026The Kiplinger Letter Here are some of the biggest events and trends in economics, politics and tech that will shape the new year.
-
Disney’s Risky Acceptance of AI VideosThe Kiplinger Letter Disney will let fans run wild with AI-generated videos of its top characters. The move highlights the uneasy partnership between AI companies and Hollywood.
-
AI Appliances Aren’t Exciting Buyers…YetThe Kiplinger Letter Artificial intelligence is being embedded into all sorts of appliances. Now sellers need to get customers to care about AI-powered laundry.
-
What to Expect from the Global Economy in 2026The Kiplinger Letter Economic growth across the globe will be highly uneven, with some major economies accelerating while others hit the brakes.
-
The AI Boom Will Lift IT Spending Next YearThe Kiplinger Letter 2026 will be one of strongest years for the IT industry since the PC boom and early days of the Web in the mid-1990s.
