The Federal Reserve likely will not raise rates at the next Open Market Committee meeting June 27 because the 90-day Treasury bill rate remains below the 6% discount rate, says Tracy Herrick, economist and chief investment strategist, Jefferies & Co.
A T-bill rate below the discount rate is ‘‘very exceptional,’’ Mr. Herrick said. The current T-bill rate is 5.68%.
‘‘If the gap continues, don’t look for the Fed to raise rates,’’ he said, referring to both the discount rate and the Fed funds rate, now at a target 6.5%.
A Fed decision to stand pat on rates could boost stock prices, particularly in technology and banking, by making investors think ‘‘the worst is over for interest rates,’’ Mr. Herrick said.
