Analyst Note
| Eric Compton, CFA |The Federal Open Market Committee issued its latest statement on July 29 and, unsurprisingly, held the federal-funds rate at 0.0%-0.25% with a unanimous vote. Rates have been at zero since mid-March. Again, there really is no debate that rates ought to be at zero for now, unless you’re in the negative-rate camp, and the Fed has consistently said it is not seriously considering negative rates as a policy tool. The rate decision was not surprising, and there really wasn’t much else of note in the latest release. After a series of highly anticipated FOMC meetings and statements, this release certainly felt much less dramatic and appeared to simply be a continuation of a holding pattern. We expect that rates will likely remain at zero for years, as was signaled at the last FOMC meeting. We are leaving our current rate forecasts within our bank models unchanged, which currently project that the first rate hike will occur in 2023.