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Fed officials will have a lot of data to consider when they sit down next Tuesday for the FOMC meeting. After all is said and done, they will probably come to the conclusion that the economic recovery is indeed in slow growth mode and that labor market conditions are improving at a snail's pace. This is not the kind of environment that is conducive to rapid rate hikes, even if it means that the federal funds rate target will be well below it's "neutral" rate of 4 percent for a while longer. Fed policymakers and economists have come to the conclusion that a rate below 4 percent, given the current rate of inflation, is considered accommodative, while a rate much above 4 percent would be considered tight. With the recovery still in its infancy, the Fed may keep the federal funds rate target at 1.75 percent for a few more months.
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Markets at a Glance Recap of US Markets The Economy The Bottom Line Looking Ahead
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