This week is going to be interesting as we await the results of the Federal Open Market Committee meeting on the 16th and 17th. If they do move forward with the first rate increase in years, I’ll consider it a birthday present.
The Week Ahead
The meeting this week is one of eight regularly scheduled meetings during the year. Minutes should be released about three weeks after any policy decision is made. Many believe a decision could come this week. We’ll see but I sure hope so. I don’t think a modest rise will do anything to markets other than restore some confidence in our economy.
Here is what the FOMC may raise:
The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank’s lending facility – the discount window. The Federal Reserve Banks offer three discount window programs to depository institutions: primary credit, secondary credit, and seasonal credit, each with its own interest rate. All are fully secured. (Learn more at www.federalreserve.gov)
Federal Open Market Committee – FOMC
A few facts about the FOMC:
1) Became responsible for setting monetary policy in 1913.
2)Their tools are control of open market operations, the discount rate and reserve requirements.