Expect FOMC To Raise Fed Funds Target

ByJohn S. McClenahen Chairman Alan Greenspan and his 11 voting colleagues on the Federal Open Market Committee (FOMC) are widely expected to raise the federal funds target rate to 1.75% at their meeting tomorrow, Sept. 21. Indeed, it would be a major economic surprise if the panel did not raise the influential short-term interest rate target, which is now at 1.5%. However, how fast and by how much the FOMC continues to raise the fed funds target rate is a matter of great speculation. Following this week's meeting, the FOMC is slated for just two more sessions this year - on Nov. 10 and Dec. 14. While it's expected that the FOMC will raise the target rate by 25 basis points at each of those sessions, the panel could go on hold before the end of the year, particularly if demand does not pick up.