NAFCU Chief Economist Curt Long statement on FOMC December minutes
WASHINGTON, DC (January 4, 2017) — 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 December meeting minutes when the announcement of an interest-rate increase was made.
“Where the committee was previously divided on the appropriate timing of the next rate hike during prior meetings, the primary source of dispute – or at least uncertainty – during the December meeting was the prospect for fiscal policy under a Trump presidency,” said Long. “A portion of the committee was convinced that fiscal stimulus is coming in 2017 and baked that into their forecasts. But the overall tone was one of caution, as the committee will wait and see how legislation unfolds.”
“As for the decision to raise rates in December, the committee was apparently of one accord. As inflation begins to strengthen, though, it was notable that the committee stressed the need to respond with ‘timely adjustments to monetary policy’ and even suggested that the Fed could begin to draw down the size of its balance sheet if inflationary pressures build too quickly.”
The National Association of Federally-Insured Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation’s federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go to www.nafcu.org or @NAFCU on Twitter.