World Perspectives

Fed’s Next Move

The Federal Reserve’s Federal Open Market Committee (FOMC) will be meeting again in June, and the markets are expecting a federal fund rate hike to 2 percent. The only real surprise would be if the increase was more than 25 basis points. When the rate was raised in March to the current 1.75 percent, the Fed released its so-called dot-plot. This is a chart with dots that each represent a Fed member’s view on where the federal fund rate should be at the end of the year as well as the following one. The dot-plot showed a median of 2.9 percent by the end of 2019, which could be interpreted as three rate increases this year (March and then presumably two more in June and December), and two next year with 3.4 percent reached in 2020...

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