The Federal Reserve signaled an interest rate next month while the stock market shows signs of technical weakness along with crude oil and junk bonds. Sounds like 2015?
Except for one thing. There’s something happening Tuesday, what was it? Oh yeah, an election.
To the surprise of absolutely nobody, the Federal Open Market Committee voted to hold interest rates steady at the end of their two-day meeting Wednesday while deciding the case for a rate hike “has continued to strengthen.” Without putting a timetable on that—as the FOMC had ahead of its initial one-quarter percentage point increase last December—the federal funds futures market placed a 78% probability of a similar move next month, to a target range of 0.5%-0.75%.
The only slightly unexpected change was that there were only two dissents on the FOMC instead of the three at the previous meeting in late September. Esther George and Loretta Mester, presidents of the Kansas City and Cleveland regional banks, again called for an immediate rate hike while their counterpart in Boston, Eric Rosengren, withdrew his objection to standing pat this time.