FOMC likely to stay mum on June rate hike

April 28, 2015
WASHINGTON (4/29/15)--While economists believe it's unlikely the Federal Reserve will choose to raise interest rates during its meeting in June, consensus among analysts appears to be that they will offer no hints about which direction it's leaning at the conclusion of its two-day meeting today (MarketWatch April 28).

"I think the Fed won't paint themselves into any corners, they want maximum wiggle room," Josh Shapiro, MFR Inc. chief U.S. economist, told MarketWatch.

Despite an expectation for a cagey statement from the Federal Open Market Committee (FOMC), however, William Dudley, New York Fed president, believes the Federal Reserve is being more transparent about forthcoming monetary policy changes than it has in the past, meaning that the markets should have adequate time to prepare.

"I'll be very surprised that whenever normalization occurs that it will be a big surprise to anyone, if we are doing our job properly," Dudley said recently (MarketWatch).

Still, most believe that for the FOMC to raise rates at its next meeting, it would require a surge of economic activity, especially given the recent disappointing streak for inflation and expectations that the economy only grew 1.2% in the first quarter.

Lou Crandall, chief economist at Wrightson ICAP, told MarketWatch that the debate has already shifted from the idea of raising rates in the middle of 2015, to whether to raise them in the fall or at the end of the year.