National Association of Federally-Insured Credit Unions (NAFCU) Chief Economist Curt Long issued the following statement today in response to the Federal Open Market Committee’s announcement of no change in interest rates after the conclusion of its two-day meeting.
"With the commencement of the balance sheet wind-down, the Fed shifts its focus to the next rate hike," said Long. "On that front, the committee offered conflicting data. In its projections committee members downgraded their outlook on inflation, which would naturally argue for a delay in rate increases. However, the interest rate projections indicate that the committee still expects a quarter-point hike in December. The biggest downgrade was reserved for long-term rates, and the committee may see persistently weak inflation as having long-lasting effects on interest rates and monetary policy, even if the short-term impact is negligible."
The FOMC last raised the federal funds target rate to a range of 1 to 1.25 percent in June. The FOMC will meet again Oct.31-Nov. 1.