Before Black Monday destroyed the stock market, a decent pool of people in the industry thought that the Federal Reserve would raise interest rates in September.
In July, Federal Reserve Chair Janet Yellen told the House Financial Services Committee that the Fed will look at raising interest rates in 2015 if and as the labor market improves and inflation hits medium-range goals.
“If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target, thereby beginning to normalize the stance of monetary policy,” Yellen said. “Indeed, most participants in June projected that an increase in the federal funds target range would likely become appropriate before year-end.”
Yellen also said that international concerns could affect the FOMC decision-making, particularly what’s happening with Greece and China currently.
Now a couple months later, it looks like China did.
On Aug. 24, a day labeled Black Monday, the market collapse is hitting the stocks that drive the housing and mortgage finance economy worse than the major indices in early trading.
New York Fed President William Dudley went on record shortly after Black Monday saying that the prospect of a September rate hike "seems less compelling" than it was only weeks ago.
In the most recent FOMC meeting minutes from July 28-29, the committee announcement said, “When the committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2%.”
So the question remains, when with the Fed raise interest rates? Economist are not offering a clear consensus, so can we do better?
Take this quick poll to give your input before the Fed meeting this Wednesday and check back before the announcement on Thursday for the results.
