Markets Looking at the Fed

The biggest thing on investors’ minds lately are interest rates, and this week offers a peek into where they’re heading.  Most investors expect rates to rise in 2015. An increase before that could rattle markets or even stunt economic growth, but waiting too long to raise rates could cause bubbles. It’s a tough call.

The Federal Reserve’s Open Markets Committee meets Tuesday and Wednesday, and Fed chief Janet Yellen will speak afterward at a press conference. Nobody thinks the Fed will change much at this meeting, so all eyes are on the future. It’s all about what Yellen has to say and connecting the dots.

Reading between the dots: The economic version of a straw poll is the dot plot. Every quarter, members of the Fed board place their vote — a dot — on where they expect the key interest rate to be at the end of 2014, the end of 2015 and the end of 2016.


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