What to expect from the Fed today

• November 1, 2017
• realestatelife
• Announcements, Business & Markets, Real Estate, Real Estate Finance

It’s Fed decision day. And if investors and analysts are judging correctly, the Federal Reserve will announce it is standing pat on interest rates and monetary policy at the conclusion of this week’s Federal Open Market Committee (FOMC) meeting.

Even though the Fed isn’t expected to increase its benchmark interest rate — and won’t hold a press conference or release updated dot plots with predictions about the economy — investors will be honing in on a few key things in the policy statement.

What might the Fed signal about the path of rate hikes for the rest the year and heading into 2018?

Unemployment has held solidly below 5% for over a year, a level many economists consider to be near full employment. The unemployment rate sank to 4.2% in September, close to its lowest level in a decade. However, the number of US jobs shrank, as non-farm payrolls fell by 33,000 — mostly due to hurricane-related disruptions.

Given that few changes are expected to the Fed’s policy statement, it will likely be overshadowed by President Donald Trump’s imminent announcement of his nominee for the next Fed chair, who would take the helm of the Fed in February if confirmed by the Senate.

Jerome Powell is seen as a compromise candidate for Trump, since he is a Republican, appears to be fairly closely aligned with the dovish Yellen on the interest rate outlook, but is more open to loosening financial regulation.

The US economy is finally showing signs of life, eight-plus years after the great recession ended. And stocks have posted impressive gains in the face of the Fed tightening monetary policy since 2015. No one at the Fed or in the White House or on Wall Street wants to rock that boat. If stocks end this week with a whimper, perhaps investors can say everyone did their job.
It’s Fed decision day. And if investors and analysts are judging correctly, the Federal Reserve will announce it is standing pat on interest rates and monetary policy at the conclusion of this week’s Federal Open Market Committee (FOMC) meeting.