RateAPY

FOMC Leaves Interest Rates Unchanged though Hoenig Dissents

Posted by: RateAPY Bank Rates News
January 27th, 2010

When it comes to the Federal Open Market Committee (FOMC), which is the Federal Reserve’s committee on interest rates, sometimes it may be what is implied that matters. Today, the FOMC left its key interest rate, the fed funds rate, at 0.000%-0.250%. The statement that interest rates should remain low for an “extended period” also expected. What was news, is that the Governor from the Kansas City Fed, Thomas Hoenig, dissented, making the vote 9-1.

Hoenig said that he believes conditions in the economy have improved and that low rates should no longer be expected. This contradicts the “extended period” statement from the rest of the FOMC. Casting this bit of doubt may be a way to get the markets ready for an upcoming rate hike.

An increase in interest rates is expected this year. That should mean that the interest that you earn on your savings account, money market account, and certificates of deposit may pay higher yields.