The Federal Reserve Board today raised short-term interest rates by 25 basis points to 1.75%. The Federal Open Market Committee "believes that, even after this action, the stance of monetary policy remains accommodative," according to a statement from the Fed.
That statement suggests more increases could be on the way, depending on economic indicators such as jobless claims and the consumer price index, explained Jeremy Fletcher, vice president and portfolio manager at American Century. "They kept the measured language in there and are keeping their options open," he noted. The bond market isn't sure whether the Fed will take a break from increasing interest rates at the next meeting or continue on the path of rate increases, he said. "I would be shocked if they went 50 basis points up at their next meeting, but 25 basis points would not surprise me," he said.
