Fed Won’t Change Interest Rates


After their two days of May meetings the Federal Reserve is announcing that they will not be raising interest rates this month, stressing it’s temporary.  “They’re thinking that weakness is likely to be seasonal, it’s transitory and that the economy is going to pick up speed,” says KTRH Money Man Pat Shinn.  The Federal Open Market Committee, who set the rate, announced they will keep the benchmark federal funds rate between 0.75% and 1%.  They last increased the rate in March.  Shinn is quick to explain that when the Federal Reserve sets the interest rate, it is only the rate at which banks lend to one another and does not directly impact consumer loans.  He thinks their move on Wednesday is consistent with expectations.   “I think what is shows is that the Federal Reserve expects the economy to pick up in the second half of the year.  They’ve left interest rates at a very low level for a very, very long time,” Shinn tells KTRH News.  Shinn predicts there will be a rate hike announced in their mid-June meeting of one quarter of a point.


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