WASHINGTON — The Federal Reserve is getting close to raising interest rates for the first time in nearly a decade, perhaps in September. When it meets this week, though, don’t expect any timetable for a rate hike to be spelled out in a post-meeting statement. For now, the Fed wants to keep its options open.
Chair Janet Yellen has left little doubt that the Fed is preparing to raise short-term rates by year’s end from the record lows the central bank set at the depths of the 2008 financial crisis. With the U.S. economy and job market now steadily rising, the need for ultra-low rates is fading.
“Our economy is in a much better state,” Yellen told Congress this month. “We’re close to where we want to be, and we now think the economy can not only tolerate but needs higher rates.”
The economy still faces an array of threats, from subpar U.S. manufacturing and business investment to troubles in Europe and Asia.
But Yellen has stressed that when the Fed raises rates, it will do so only gradually.
