RateAPY

Looking for Hints from the FOMC

Posted by: RateAPY Bank Rates News
December 15th, 2009

The FOMC started another of its two-day meetings today, with an announcement on monetary policy expected tomorrow afternoon. The consensus seems to be that the Feds will leave interest rates unchanged and hold to their policy of interest rates remaining low for an “extended period.” Mortgage lenders and banks that offer savings accounts, money market accounts, and certificates of deposit will be searching the upcoming statement for the slightest hint of any change in direction for monetary policy.

It is curious, though, that the consensus would be so certain considering the PPI and Core PPI numbers on inflation were so much higher than expected. PPI was up 1.8% for November, while the Core PPI, which excludes food and energy, was up 0.5%. Some analysts have said that November’s numbers are a fluke, and next month’s numbers should be back to normal. Perhaps this is why the consensus is that interest rates will not change.