FOMC to Keep the Powder Dry for a Second-Half Rate Hike
The June FOMC meeting is a watershed moment for the financial markets. It is the first in which interest rate increases are theoretically possible given previous guidance from monetary policy makers. A rate increase is extremely unlikely at this point, however, on account of the weak performance of the economy in the first quarter. Instead, committee members will focus on economic momentum heading into midyear. They will try to determine if the economy is on a trajectory that can readily withstand the onset of rate increases sometime in the second half of 2015. Policy makers will provide plenty of fodder for market participants to digest.
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