By Mohamed A. El-Erian | Bloomberg
(Editor’s note: Opinion pieces are published for discussions purposes only.)
The Dec. 14 announcement by the Federal Open Market Committee will be of particular interest, not only for what it says about any change in interest rates, but also for its signals about the path ahead. Here are five things that are likely to emerge from the statement by the Federal Reserve’s policymaking committee and the ensuing press conference by Fed Chair Janet Yellen.
- The Fed will hike rates by 25 basis points, only the second increase in 10 years. This will be driven by additional progress toward its dual objectives –full employment and inflation converging to 2 percent — along with a desire to validate high market expectations about rates, and to respond to diminished headwinds from abroad (particularly from Europe, despite the results of last week’s Italian referendum).
