Federal Reserve interest rate statement, November 2018

Federal
Reserve Chairman Jerome Powell.
Carolyn Kaster/AP

At 2 p.m. ET, the Federal
Reserve will release a policy statement that’s widely
expected to show officials decided not to increase their
benchmark interest rate. 

The policy-setting Federal Open Market Committee concluded a
two-day meeting Thursday.

Traders are certain that the FOMC will next
raise interest rates in December — a decision that will
almost immediately lift borrowing costs for Americans with credit
cards and other short-term loans. The market has priced in a
78% probability that the FOMC will raise the benchmark fed funds
rate to a range of 2.25%-2.5% at its meeting in December,
according to data compiled by Bloomberg.

“Heightened
financial market volatility has not altered the Fed’s resolve
to hike in December,” said Ellen Zentner, Morgan Stanley’s chief
US economist, in a preview. The Fed also appears to be unwavering
in the face of criticism from President Donald Trump, who

said the central bank was “crazy” for tightening financial
conditions. 

The Fed’s statement is likely to show that it plans to continue
raising rates if economic growth and the jobs market remain
strong. However, some corners of the economy like
housing and
business investment have softened.  

“Economic data since the September meeting remains
constructive and thus we do not anticipate any substantial
changes to the policy statement — including the assessment of
current economic performance, forward guidance and balance of
risks,” Sam Bullard, a senior economist at Wells Fargo, said in a
preview.

Thursday’s statement marks the Fed’s final policy announcement
that won’t be followed by a press conference for the foreseeable
future. Fed Chairman Jerome Powell announced in June that
starting in January 2019, he will hold
press conferences after every meeting to improve
communications. Since Ben Bernanke began the practice in April
2011, press conferences have been held once a quarter, or four
times out of the eight Fed meetings scheduled every year.

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