Low Inflation May Keep Fed From Raising Rates Until Late This Year

Policymakers remain divided in their evaluation of the economy and its need for an interest rate hike to stimulate growth.

With inflation rates remaining below the Federal Reserve’s 2% goal, and employment gains lower than expected last month, it remains a close call. Financial markets have been following Fed officials’ discussions looking for a hint as to whether rates would rise. During the past several weeks, investors saw a low probability of a rate increase this month, but more recently they’ve become more convinced of it taking place during the Fed’s meeting next week, the Wall Street Journal reports.

The Fed is facing some external pressures to move as money managers and economists have spoken out against the low rate's negative effect on profit margins. “You don’t want to get behind the eight ball on this one,” JP Morgan CEO Jamie Dimon said. “And I think it’s time to raise rates.” [WSJ]

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