Despite no action today to raise the Fed funds target rate, an increase is likely by the end of the year, CUNA Chief Policy Officer Bill Hampel said Wednesday. The Federal Open Market Committee (FOMC) decided at its Wednesday meeting not to raise the target rate.
“Although the Fed did not move this time, an increase in the fed funds target rate would have been consistent with an economy approaching full employment with moderately rising inflation,” Hampel said. “Therefore, an increase by the end of the year is very likely, to be followed by further increases next year, although a return to ‘normal’ rates will take several years.
“Higher short-term interest rates will provide welcome relief to savers, and should present no problems for credit unions,” he added.
More information on Wednesday’s FOMC meeting can be found on the committee’s website. The next meeting is scheduled for Nov. 1-2.