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Forecast: Two Fed Rate Hikes This Year

By John S. McClenahen The latest economic forecast from Global Insight has Chairman Alan Greenspan and his colleagues on the Federal Open Market Committee (FOMC) raising the federal funds target rate in August and again in November of this year. But, unlike a month ago, the Waltham, Mass.-based forecasting firm doesn't think the FOMC will do a third hike in December. Right now the federal funds target rate, the interest rate on overnight loans between banks, is 1%. Global Insight predicts the FOMC will raise the target rate by 25 basis points to 1.25% at its Aug. 10 meeting and boost the target rate another 25 basis points to 1.50% at its Nov. 10 session.

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