SPRINGFIELD, Mass. (WWLP) – It’s been nine years since the U.S. saw an interest rate increase, and Thursday afternoon the Federal Reserve voted again to keep things as is. With inflation well below the 2-percent objective, and a jittery few weeks in the stock market, Fed Chair Janet Yellen said soon, but not now.
The first rate increase isn’t going to shake things up overnight. You don’t need to rush out to get a loan to buy a home or car. But it does mean we can expect to see more hikes over the next year or two.
“Ultimately she’d like to go from zero percent to 3.75. That’s going to take many years and many rate increases, maybe 25 basis points each time,” said Mark Teed of Raymond James Financial.
For now, the Fed continues to wait for signs inflation is picking up. It’s faded somewhat because of cheaper oil prices and a stronger dollar. Still, Yellen says a rate hike is likely this year; they’ll meet again in October and December.
And the decision doesn’t only depend on factors here, like the jobs report. Fed officials cited ‘recent global developments’ that may restrain economic activity somewhat, which suggests they’re keeping a close eye on the slowdown in China and other European markets.