Fidelity Select Fundranker

Fundranker Blog—April 2015 Archive

When Will Fed Raise Rates?

The Federal Open Market Committee met most recently on March 17 and 18. Its policy statement released at the end of that meeting no longer referred to being “patient” on raising rates. But Fed Chair Janet Yellen emphasized in her press conference after the statement, “Just because we removed the word ‘patient’ from the statement doesn’t mean we’re going to be impatient ... In particular, this change does not mean that an increase will necessarily occur in June, although we can’t rule that out.”

Federal Reserve Bank of Richmond President Jeffrey Lacker, in remarks Tuesday, March 31, at the Richmond Fed, said “... the case for raising rates will remain strong at the June meeting.” Lacker is considered to be hawkish on rates. He dissented at all eight FOMC meetings 2012 in favor of tighter monetary policy, but he has voted with the majority at both meetings held in 2015. Lacker rotated out of a voting position on the FOMC during 2013 and 2014.

On April 1, Dennis Lockhart, President of the Federal Reserve Bank of Atlanta, told reporters “The weakness of the first quarter got my attention. I still believe the factors are transitory. We will see a pick-up.” He feels an interest rate hike is likely in the June to September period. Lockhart is considered a centrist on the FOMC.

At the March 17-18 meeting, officials also cut their median estimate for the federal funds rate at the end of 2015 to 0.625% from 1.125% in their December forecasts, leading many market participants to expect the FOMC’s rate “lift-off” to be in the fall rather than mid-year.

The FOMC will meet six more times this year in April, June, July, September, October, and December.

Posted 4/5/15 12:32pm ET in Economy | Permalink | Comments (0)