Is the Fed Waking Up?

The Federal Reserve didn’t raise interest rates after its meeting concluded yesterday, but it did signal such a move is likely in the coming months. The Fed released its so-called dot plot, which shows officials’ outlooks for interest rates, and 15 of 17 said they expected to start raising them before the end of the year.

Now all eyes are on September, which is the next real opportunity for the Fed to raise interest rates. The new dot plot shows that all 17 members expect the fed funds rate for the end of 2015 to be under 1 percent, with the median member seeing rates between 0.5 percent and 0.75 percent. That would appear to signal rate hikes later this year.

The Fed also upgraded its assessment of the economy slightly from "slowed" to "expanding moderately."  The Fed noted improvements in housing, although household spending remains "moderate" and the report highlighted continued weakness in business spending and "soft" U.S. export growth.