WASHINGTON (7/9/15)--Members of the Federal Open Market Committee (FOMC) were somewhat distressed by Greece’s unraveling economy, but not to the point that it alone would alter the timing of forthcoming rate hikes, according to the minutes of the FOMC’s June meeting, released Wednesday (Economy.com July 8).
Still, while the FOMC’s dot plot forecasts two rate hikes before the end of 2015, the minutes showed members aren’t yet certain when the rate hikes will come to pass.
The majority of the FOMC still needs proof that “economic growth was sufficiently strong and labor-market conditions had firmed enough to return inflation to the committee’s longer-run objective over the medium term,” the minutes said (MarketWatch July 8).
“The Greek crisis or the drop in Chinese stock market are not expected to harm the U.S. economy, and the disruption to financial markets should be temporary,” said Ryan Sweet, Moody’s analyst (Economy.com). “Also, some of the uncertainty about the future path for Greece and the euro zone should fade by September. But if the U.S. economy or financial markets are not as resilient as expected, there will be implications for monetary policy.”
The committee’s next meeting falls on July 28-29.