The Federal Reserve will announce today its decision on the benchmark interest rates in the US. Most experts expect interest rates to be kept within the range of 2.00-2.25%, but also to confirm the prospect of raising them by another 25 basis points in December.
According to Wall Street analysts, the Federal Reserve will continue to follow its guidelines for gradual raising of the benchmark interest rates if the economic data supports it.
However, these guidelines do not include an automatic response to short-term stock market fluctuations.
The focus is on economic data, and so far they are solid. While this trend continues, the Fed will follow its intention to gradually raise its benchmark interest rates.
Unfortunately for Wall Street, the central bank managers will probably not conclude that short-term stock market fluctuations will hamper economic progress. While markets had a terrible October, in November they recovered, which may mitigate potential concerns.
The stock market volatility is expected to be mentioned in the deliberations of the meeting but should not lead to a change in the monetary policy rate. The Fed is motivated by the data, and for now they support higher interest rates.