Fed Increasing Rates? Seems Unlikely

  • Chad Haasken
  • 06/19/16

At the onset of 2016, the Federal Reserve had planned on raising interest rates four times over the course of the year. However, since the last rate hike in December of 2015, the Fed has changed their tune and is now only planning on two hikes; the first of which could take place this July. The reason for the reduction in hikes is due to slow economic growth and the uncertainty of the United Kingdom staying in the European Union, which as of today (6/20) has the referendum passing by a very slight margin of 44% to 43% with 2 1/2 days left until the polls close. While Yellen and the Fed plan on raising rates at least once if not twice before the new year, Reuters polled a number of economist and six out of 11 thinks the Fed will hold the rates. While it seems unlikely the central bank will raise interest rates this year with slow economic growth and the uncertain domino effect the UK referendum will have on the EU, it is a safe assumption they will go up in 2017 once the US presidential election is in the rear view mirrors.

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