The next interest rate hike is scheduled for December 16 2015. This will be the first rate hike in nearly a decade. The last rate hike occurred on June 29 2006. The target rate at that time was 5.25%. The current target rate is 0.25%.
There has been much speculation as to when the next interest rate hike will occur. Many believe that the December 16th hike will be the first of several hikes in the next few years. Others believe that the Fed will keep rates unchanged for the foreseeable future.
The Fed has been clear that it will not raise rates until it sees further improvement in the economy. Inflation has been low in recent years and the Fed wants to see it increase before raising rates. The Fed also wants to see unemployment continue to decline.
There are many factors that could influence the Fed’s decision on when to raise rates. The most important factor is the health of the economy. If the economy continues to improve the Fed is more likely to raise rates sooner rather than later. Other factors include:
-Inflation: If inflation starts to rise the Fed is more likely to raise rates.
-Employment: If the unemployment rate continues to decline the Fed is more likely to raise rates.
-Financial markets: If financial markets become unstable the Fed is less likely to raise rates.
-International factors: If there are problems in the global economy the Fed is less likely to raise rates.
The Fed will also be closely watching the presidential election. If a new president is elected who is opposed to higher interest rates the Fed may delay a rate hike.
The bottom line is that the Fed will not raise rates until it believes that the economy is strong enough to handle higher rates. That could happen in December or it could happen later. It all depends on the data.
What was the most recent interest rate hike?
The most recent interest rate hike was in December 2015.
How often are interest rate hikes?
Interest rate hikes usually happen every few years.
How does an interest rate hike affect consumers?
An interest rate hike affects consumers by making it more expensive to borrow money.
How does an interest rate hike affect businesses?
An interest rate hike affects businesses by increasing the cost of borrowing money.
How does an interest rate hike affect the stock market?
An interest rate hike can affect the stock market in a number of ways including making it more difficult for companies to borrow money and causing investors to sell stocks.
How does an interest rate hike affect the economy?
An interest rate hike can affect the economy by making it more expensive to borrow money which can lead to slower economic growth.
What are the potential consequences of an interest rate hike?
The potential consequences of an interest rate hike include slower economic growth higher borrowing costs and lower stock prices.
Is an interest rate hike always bad for the economy?
No an interest rate hike is not always bad for the economy.
Sometimes an interest rate hike can be a necessary step to help control inflation.
How does the Federal Reserve decide when to raise interest rates?
The Federal Reserve uses a number of different factors to decide when to raise interest rates including inflation employment and economic growth.
What happens if the Federal Reserve raises interest rates too quickly?
If the Federal Reserve raises interest rates too quickly it can lead to higher borrowing costs and slower economic growth.
What happens if the Federal Reserve raises interest rates too slowly?
If the Federal Reserve raises interest rates too slowly it could cause inflation to increase.
What is the goal of the Federal Reserve when it comes to interest rates?
The goal of the Federal Reserve is to keep interest rates at a level that promotes healthy economic growth.
How does the Federal Reserve change interest rates?
The Federal Reserve can change interest rates by buying or selling Treasury securities.
What is the federal funds rate?
The federal funds rate is the interest rate at which banks lend money to each other overnight.
How does the federal funds rate affect consumers?
The federal funds rate can affect consumers by making it more expensive to borrow money.
