The FOMC June 2006 meeting starts on June 28 and the FED decision will be announced on June 29 at 14:15 EST time. The consensus in for a 25 points increase to 5.25 %. The decision seems almost a done deal, but what are the things that the FED is watching for, and what happens on June 29 and beyond? I did a little research on this subject, you can find the whole story here:
FOMC June 2006 meeting
Here are some of the more important points that I make:
1. On the last meeting the FED said the decision will depend on incoming data, and the data came out strongly in favor of a rate increase.
2. Reason for concern...Higher Interest Rates Hurts the Global Markets Over 2 Trillion. The world markets don't like the tone of the central banks.
3. More rate hikes to come: The list of prominent names that expect the FED to go near 6 % include : Barclays with 6 % by year end, Lehman Brothers with a forecast of 5.75 per cent, JPMorgan and Credit Suisse, with a 6 per cent peak but both expect that rate some time next year.
What your opinion on this subject?
Is a 25 points rate hike in June a done deal, and what will the FED do after that?