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Time to Buy? Consider the Fed and Interest Rates

The Board of Governors of the Federal Reserve meets to discuss economic policy on about eight pre-set dates throughout the year (roughly every 5-8 weeks). This board determines benchmark interest rates that ultimately impact consumer rates. At the last meeting in September, the Federal Reserve decided to leave interest rates unchanged.

In all but one of the last 23 Federal Open Market Committee (FOMC) sessions, interest rates have remained unchanged. At year-end 2015, the Fed imposed a .25 basis point increase while optimistically forecasting subsequent rate hikes. However, the Fed altered its tone just 60 days later (in February 2016,…


The Fed & Interest Rates – Why They Matter

The Federal Reserve decided to pass on the opportunity to increase interest rates in September. This comes on the heels of continued strong employment growth, although overall U.S. economic growth remains slow compared to historical averages with Gross Domestic Product (“GDP”) growth at just 1.5 percent for 2016.

The Fed has a dual mandate of full employment, which is near target, and price stability (inflation), which remains below the target. The Fed’s goal of 2% inflation, as measured by the Personal Consumption Expenditures (“PCE”), has remained below…

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