The Federal Open Market Committee (FOMC) – the Fed’s monetary-policy setting arm – begins its June meeting today and is expected to discuss several topics of interest to credit unions.
Until recently, it was widely believed that the committee would raise the target federal funds rate by 50 basis points. However, on the heels of the May consumer price index report, which revealed inflation rose to its highest level since 1981, The Wall Street Journal reported that a 75-basis point hike is possible. NAFCU Chief Economist Curt Long said that is “now the most likely outcome, as inflation continues to surge in spite of rising rates.”
During its May meeting, the committee raised the federal funds rate target by 50-basis points to a range of 0.75 to 1 percent. However, the committee revealed that although overall economic activity edged down in the first quarter, household spending and business fixed investment remained strong.
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