Fed Rate Increase Could Boost Funds Rate To 6.5%

Jan. 13, 2005
Chairman Alan Greenspan and his Federal Reserve colleagues don't always do what companies and industry executives expect -- or what they fear. But there's little doubt that the central bank's Federal Open Market Committee (FOMC) will raise short-term ...

Chairman Alan Greenspan and his Federal Reserve colleagues don't always do what companies and industry executives expect -- or what they fear. But there's little doubt that the central bank's Federal Open Market Committee (FOMC) will raise short-term U.S. interest rates by 50 basis points (one-half of 1%) at its meeting May 16. Their action would bring the economically potent federal funds rate to 6.5%. What next? Bruce Steinberg, chief economist of Merrill Lynch & Co., New York, believes the FOMC will add another 25 basis points to the federal funds rate, bringing it to 6.75%, when it meets on Jun. 27-28. However, David Wyss, chief economist at Standard and Poor's DRI, Lexington, Mass., expects the inflation-wary FOMC to repeat its expected May 50-basis-points increase in June. "It seems unlikely that the Fed would move 50 basis points in May and then go back to a 25-point move in June," says Wyss.

Popular Sponsored Recommendations

How to Build Zero-Cost On-Site Solar and Storage Projects

Nov. 25, 2023
The Inflation Reduction Act offers tax credits, incentives, and financing that enable no-cost projects. In Enel’s eBook, discover the critical role that incentives play in your...

The Ultimate Ecommerce Excellence Checklist

Oct. 2, 2023
Scaling ecommerce operations is no easy task when your business is moving fast. Assess your current ecommerce maturity level and set optimization priorities with this practical...

Digitally Transforming Data and Processes With Product Lifecycle Management

Oct. 29, 2023
Manufacturers face increasing challenges in product development as they strive to consistently deliver improved results. Discover how industry leaders are improving time-to-market...

Smarter Savings for Manufacturers - Guide

Sept. 12, 2023
Enhance your service experiences and boost revenue while reducing costs. Learn how one platform can help your business be more agile and productive in today's market.

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!