IBM reports its lowest quarterly revenue since And its shares slide initially in afterhours trading. Securing your nest egg.
The committee wants to see some further progress before feeling that it will all be appropriate to raise rates. But when it does, the focus should be on what happens next.
Stick with what you know. And good evening, everyone. We begin with the Federal Reserve, which appears to be on track to raise interest rates sometime this year.
Chair Janet Yellen provided only feint clues. But the central bank did upgrade its view of the economy, everything from housing to consumer spending. Stocks rose as Yellen spoke at the news conference this afternoon. The Dow Jones Industrial Average rose 31 points, to close at 17, Yields or interest rates meantime turned lower with the year note at 2.
Hampton Pearson has more on what Ms. Yellen said about the first potential rate hike in nearly a decade. Federal Reserve monetary policymakers see an economy that has recovered since the beginning of the year, but it wants to see stronger gains in the job markets and higher inflation before raising interest rates for first time in nine years.
The committee continues to judge that the first increase in the federal funds rate will be appropriate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.
At our meeting that ended today, the committee concluded that these conditions have not yet been achieved. While the Fed gave no timetable for a rate hike, all but two of 17 policymakers think the central bank will raise key short-term rates sometime this year.
With the first hike coming most likely in September. On the one hand, waiting too long to begin normalization can risk significantly overshooting our inflation objective, given the lags in the operation of monetary policy.
Beyond job growth, the Fed still sees inflation as too low, which in the long run holds back economic growth. Business investment is slowed, due to declining energy prices.
American exports have become more expensive because of the rising value of the dollar, all impacting the timing of that rate hike. Professor Blinder, always great to have you with us. I gather that one of the things that you saw in the data today was that the members of the committee are saying that the economy is growing, or their forecast for it is slower and lower than previously thought.
Does that do anything to your view as to when the Fed may move to raise rates? And what you saw among other things in the forecast or the statement was a weaker outlook for the year.
And not just because of the first quarter. But it looks like they are pretty mediocre on the second half of this year. And so, that logically pushes the date back if it pushes at all. So, Alan, given what you heard from the Fed chief, when they do eventually move on interest rates, what will subsequent rate hikes look like?
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