Fed Holds Steady, Hints at Two More Rate Hikes

posted by iHeartMedia's Nik Rajkovic - 

Federal Reserve Building - Washington DC, USA

The Federal Reserve is holding interest rates steady.  But the central bank is widely expected to hike interest rates two more times this year, despite President Donald Trump's push for a pause in rising rates.

The Fed's statement declared that the job market continues to strengthen and that “economic activity has been rising at a strong rate.”  Fed officials said the overall inflation rate and the rate that excludes volatile food and energy prices both “remain near 2 percent,” which is the Fed’s target level.

"I think it's clear the Fed is on a path to raise rates at their next meeting, their September meeting, and probably their December meeting as well because they're worried inflation is picking up," says Jordan Goodman, "America's Money Answers Man."  "That would be four interest rate increase this year and think the statement made that very clear."

"They'll probably get the rate they control, which is now two percent, propped up to three or three-and-a-half percent in a year or so," he says.  "As long as they're on a predictable path I think Wall Street is pretty happy."

President Trump recently criticized the Fed for raising rates so rapidly.

"He's a real estate guy and he doesn't like high interest rates, and in fact, higher interest rates are affecting the real estate market," says Goodman.  "You're seeing a definite slowdown in sales and mortgage rates have gone up."

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