The Federal Reserve will not increase interest rates at this week’s meeting, but will likely hint that rate hikes are on the horizon. Reuters reports that, as long as U.S. inflation and jobs continue to strengthen, economic weakness overseas won’t stop rates from rising soon. The last time Fed officials met, uncertainty over the impact of slower growth in China and Europe drove policymakers to signal it would stay on hold. New forecasts this week following the meeting are expected to indicate the possibility of two or multiple rate hikes, starting around mid-year.
U.S. inflation has shown signs of stabilizing, according to data compiled by the Fed. However, Fed Chair Janet Yellen may be wary of sending too strong a signal of coming rate hikes, for fear of creating unnecessary volatility in markets.
Source: NAFB News Service