Today marks the beginning of the Federal Open Market Committee's August meeting to decide monetary policy. The meetings produce minutes that are carefully reviewed by financial masterminds across the nation. But the biggest decision that everyone looks for is whether they decide to change the federal funds rate. That's the overnight interest rate at which banks lend to each other, through the Federal Reserve. It's directly linked to money supply. Since December, that rate has been set at between 0% and 0.25%. Major market players overwhelmingly believe that the rate will remain unchanged. But what do Atlantic Business readers think? Vote after the jump!
Lowering the federal funds rate generally heats up economic activity by increasing the money supply. With the rate so low already, the Fed does not have much room to lower it. Recent indicators that the economy might be heading in the right direction further imply that a mostly symbolic measure of setting the rate target at exactly zero seems unlikely. It also might be too soon to begin raising the rate, as the Fed certainly would not want to wither any possible green shoots. As a result, I'd bet on no change.
But what do you think? Vote below:
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