Fed expected to leave interest rates unchanged, Latest World News - The New Paper

Fed expected to leave interest rates unchanged

This article is more than 12 months old

WASHINGTON: The US Federal Reserve is expected to hold interest rates steady at its meeting this week as it pauses to parse more economic data.

But the Fed may hint it is on track for an increase in next month.

The central bank is scheduled to release its policy decision at the conclusion of its two-day meeting today. Fed Chair Janet Yellen is not due to hold a press conference.

Most policymakers have already made plain that in contrast to previous years, the Fed feels more confident in its forecast of two more rate increases this year.

"The bar to disrupting the Fed's plans is higher now than it was in previous years," said Michael Gapen, chief economist at Barclays in New York in a note to clients.

The Fed is in its first tightening cycle in more than a decade.

A quarter percentage point increase last December was followed two meetings later by another hike in March.

Economists polled by Reuters see little chance of a move at this week's meeting. Investors next see an interest rate rise in June, according to Fed futures data compiled by the CME Group.

The rate-setting committee also is still waiting to see to what extent Trump administration policies on tax, spending and regulation will be able to get through Congress.

A stimulus package could speed up the pace of hikes.

Since the last meeting economic data has been mixed. The economy grew at a sluggish 0.7 per cent annual pace in the first quarter as consumer spending almost stalled. - REUTERS

united statesFinanceBANKS