Agency analysis: Fed to signal March rate hike

2022-06-06 0 By

The Federal Reserve will announce a decision today that will almost certainly keep its benchmark interest rate near zero while sticking to its bond-cutting program and ending its bond-buying program in March.With the U.S. unemployment rate falling below 4%, the Fed is likely to say the economy is at or near full employment and that it may be appropriate to take the first step toward raising rates at its March meeting.Dreyfus & Vincent Reinhart, Mellon’s chief economist, said the Fed did not want to surprise markets.The January meeting was largely a framework for market participants to understand that the Fed would act on both conventional and unconventional policy tools.They will signal action on interest rate policy and let it be known that they will soon set out a strategy to shrink the balance sheet.