The Fed should admit it plans to raise interest rates only once it sees stronger economic growth, calm global conditions, and a sustainable upward trend in inflation.
The Federal Reserve issued its FOMC statement on Wednesday. Yellen followed up the dovish release by confirming a cautious stance, citing the British vote on whether to exit the European Union as a factor in the Fed’s decision.
Make Dwight A TRUSTED Part Of Your Day
Read more insights from Dwight Johnston on TrustCU.com or register for his Daily Dose e-newsletter to receive his blogs straight to your inbox.
Although the FOMC statement and Yellen upgraded economic activity, they downgraded job growth. Apparently, the Fed is worried the 35,000 gain in May might go from it was just one month to it’s now been several months.
Yellen said tightening will stay on the table for any future meeting, but it’s clear it will be at the end of table. In responding to questions about the Fed’s lower rate forecast the dot game, as I call it Yellen said rates could be lower for longer than the Fed anticipated.
Several economists and analysts made a big deal out of the Fed’s dot game.
Fed officials significantly lowered forward rate expectations from the April meeting. They lowered the expected funds rate by 60-70 basis points for the end of 2017 and 2018 to 1.60% and 2.40%.
Dwight Johnston is the chief economist of the California and Nevada Credit Union Leagues and president of Dwight Johnston Economics. He is the author of a popular commentary site and is a frequent speaker at credit union board planning sessions and industry conferences.
June 16, 2016
Daily Dose Of Industry Insights
Stay informed, inspired, and connected with the latest trends and best practices in the credit union industry by subscribing to the free CreditUnions.com newsletter.
Settle In For Lower Rates
The Federal Reserve issued its FOMC statement on Wednesday. Yellen followed up the dovish release by confirming a cautious stance, citing the British vote on whether to exit the European Union as a factor in the Fed’s decision.
Make Dwight A TRUSTED Part Of Your Day
read moreRegister Now
Although the FOMC statement and Yellen upgraded economic activity, they downgraded job growth. Apparently, the Fed is worried the 35,000 gain in May might go from it was just one month to it’s now been several months.
Yellen said tightening will stay on the table for any future meeting, but it’s clear it will be at the end of table. In responding to questions about the Fed’s lower rate forecast the dot game, as I call it Yellen said rates could be lower for longer than the Fed anticipated.
Several economists and analysts made a big deal out of the Fed’s dot game.
Fed officials significantly lowered forward rate expectations from the April meeting. They lowered the expected funds rate by 60-70 basis points for the end of 2017 and 2018 to 1.60% and 2.40%.
Read more about analyst reaction to the Fed’s interest rate forecast.
Dwight Johnston is the chief economist of the California and Nevada Credit Union Leagues and president of Dwight Johnston Economics. He is the author of a popular commentary site and is a frequent speaker at credit union board planning sessions and industry conferences.
Daily Dose Of Industry Insights
Stay informed, inspired, and connected with the latest trends and best practices in the credit union industry by subscribing to the free CreditUnions.com newsletter.
Share this Post
Latest Articles
Meet The Finalists For The 2025 Innovation Series: Lending By Callahan & Associates, Inc.
Meet The Finalists For The 2025 Innovation Series: Member Experience By Callahan & Associates, Inc.
5 Takeaways From Trendwatch
Keep Reading
Related Posts
Markets Sift Through Noise As They Look For Clarity
Economic Themes To Consider For 2025
Uncertainty Remains After An Eventful Month For Financial Markets
Meet The Finalists For The 2025 Innovation Series: Lending
5 Takeaways From Trendwatch
Andrew LepczykMarkets Sift Through Noise As They Look For Clarity
Jason HaleyView all posts in:
More on: