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Last Fed meeting of the year

Hillary Wicai Dec 12, 2006
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Last Fed meeting of the year

Hillary Wicai Dec 12, 2006
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SCOTT JAGOW: For months and months on end, every time the Federal Reserve met, it was a foregone conclusion the Fed would raise interest rates. You may have felt the sting of that, but that streak ended over the summer and since then, the Fed’s been on a roll of not raising rates.There’s another meeting today. Hillary Wicai tells us what’s brewing this time.


HILLARY WICAI: Housing and auto industries aside, the economy is growing and its slower growth has seemed to make the Federal Reserve more comfortable.

Fed watchers believe that means the panel is likely to leave interest rates alone today, but many would be happier if the Fed lowered them to give the economy a boost.

David Wyss is chief economist at Standard & Poor’s. He doesn’t expect the Fed to do that until it sees inflation fall for a few months in a row.

DAVID WYSS: My feeling is they probably won’t see that until midyear. They’re worried about the dollar. The dollar is going down. They’re a little afraid to loosen while the dollar is going down because that could lead to a weaker dollar. It could lead to more import price inflation and that in turn could lead to more domestic inflation.

If the Fed keeps its finger on the pause button, today would mark the fourth meeting in which the panel left the target rate unchanged at 5.25%.

In Washington, I’m Hillary Wicai for Marketplace.

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