Consensus Says Feds Will Raise Interest Rates Today
Word on the street says it's a certainty. Analysts, economists and investors expect Federal Reserve Chairman Alan Greenspan to raise short-term interest rates a quarter notch to 5.25 percent. With almost every American working, wages rising, stocks soaring and international economies rebounding, there seems to be little doubt that the Fed will make the move to slow the surging economy.
The bigger question at this point is whether more rate increases will be on the Fed's agenda during the rest of this year, of if this adjustment will be enough to keep inflation under wraps.
"There is no evidence of inflation pressures yet, so the Fed can afford to be patient if they want to, but I don't think they want to wait around for problems,"
said William Dudley, chief economist of a href="http://www.goldmansachs.com">Goldman Sachs Co. in New York.
The stock market is ready for the rate hike. For more than two weeks, the Dow Jones industrial average has shifted between 10,700 and 11,100 as investors
weighed the chances of another rate increase -- and whether it would be only a one-time event.
Many economists believe the fed-funds rate is headed back to where it started -- 5.75%