Monday, November 7, 2016

Rate Hike may be possible in December 2016

Janet Yellen announced recently that the central bank would once again hold off on raising its interest rate target, opting instead to wait for the American economy to pick up steam before tightening its monetary policy.

The Federal Open Market Committee (FOMC), which determines the target for the interest rate at which banks lend to one another in the short term, is expected to raise its rate target after the group’s next meeting, between Dec. 13 and 14, 2016. 

“From a policy perspective, we of course need to bear in mind that an accommodative monetary stance, if maintained too long, could have costs that exceed the benefits by increasing the risk of financial instability or undermining price stability.”