WASHINGTON (AP) – With consumers spending and employers hiring more freely, the U.S. economy has fared better of late. But when the Federal Reserve ends its latest policy meeting Wednesday, most analysts think it will signal that it wants to see further gains before raising interest rates again.
The Fed is expected to issue a statement that acknowledges the strengthening economy without providing much clarity about when the next rate hike might occur.
Still, some Fed-watchers say the wait may not be much longer. In the eight weeks between this week’s meeting and the next in September, the Fed will see a flurry of fresh economic data, including two monthly jobs reports. If the new figures show sustained improvement, September might be when the Fed decides to resume the rate increases it began in December.
“If we get decent economic news between now and September, I think the odds are good that the Fed will move,” said David Jones, chief economist at DMJ Advisors. “It is still a data-dependent story, but I think the Fed will know enough by then to move.”
Jones foresees two modest rate hikes this year, one in September, the other in December. And he said investors may not have to wait until September to know what the Fed is thinking. Jones suggested that Chair Janet Yellen may use her speech at the Federal Reserve’s annual late-summer conference in Jackson Hole, Wyoming, to put investors on notice of a coming rate hike.