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.
-
Nasdaq Sinks 418 Points as Tech Chills: Stock Market TodayInvestors, traders and speculators are growing cooler to the AI revolution as winter approaches.
-
23 Last-Minute Gifts That Still Arrive Before ChristmasScrambling to cross those last few names off your list? Here are 23 last-minute gifts that you can still get in time for Christmas.
-
The Rule of Compounding: Why Time Is an Investor's Best FriendDescribed as both a "miracle" and a "wonder," compound interest is simply a function of time.
-
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.
-
Amid Mounting Uncertainty: Five Forecasts About AIThe Kiplinger Letter With the risk of overspending on AI data centers hotly debated, here are some forecasts about AI that we can make with some confidence.
-
Worried About an AI Bubble? Here’s What You Need to KnowThe Kiplinger Letter Though AI is a transformative technology, it’s worth paying attention to the rising economic and financial risks. Here’s some guidance to navigate AI’s future.
-
Will AI Videos Disrupt Social Media?The Kiplinger Letter With the introduction of OpenAI’s new AI social media app, Sora, the internet is about to be flooded with startling AI-generated videos.
-
What Services Are Open During the Government Shutdown?The Kiplinger Letter As the shutdown drags on, many basic federal services will increasingly be affected.
-
The Economy on a Knife's EdgeThe Letter GDP is growing, but employers have all but stopped hiring as they watch how the trade war plays out.
