The Federal Open Market Committee\u2019s last meeting (in May) clearly described their concern over stubborn inflation (at 3.4%) and indicated they would keep the same Federal interest rate (at 5.25%-5.5%) until inflation consistently approaches the 2.0% target. They were also in agreement to increase the interest rate if inflation and unemployment increases significantly. Next meeting is on June 11-12 (next week).<\/p>\n\n\n\n
On the other hand, this month, we saw the first of the Group of Seven central banks kick off an easing cycle when The Bank of Canada<\/em><\/strong> cut interest rates by a quarter of a percentage point (now at 4.75%). The rationale provided is that inflation in Canada (measured at 2.6%) is heading towards the 2.0% bank target.<\/p>\n\n\n\n Is this a sign that the Feds will do the same at their next meeting?<\/em> Maybe, if inflation has dropped below 3%.<\/em><\/p>\n\n\n\n Any drop-in interest rate is beneficial to those seeking a new loan or mortgage BUT the opposite is true for those seeking to retire early (before age 59\u00bd) and use an exception to withdraw from the pre-tax accounts without paying a penalty \u2026 see the \u2018Early Retirement:\u2019 article below.<\/p>\n\n\n\n Edi Alvarez, CFP\u00ae www.aikapa.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" The Federal Open Market Committee\u2019s last meeting (in May) clearly described their concern over stubborn inflation (at 3.4%) and indicated they would keep the same Federal interest rate (at 5.25%-5.5%) until inflation consistently approaches the 2.0% target. They were also … Continue reading
BS, BEd, MS<\/p>\n\n\n\n