The Federal Reserve will release its September statement on Thursday, September 17th. For months, economists have expected the Fed to hike short-term interest rates for the first time since 2006 during this meeting. ‘We do think the Federal Reserve will hike interest rates by 25 basis points on Thursday,’ said Michelle Meyer, deputy head of U.S. economics at Bank of America (BAC) Merrill Lynch. ‘The Fed is likely to characterize the rate hike as the beginning of a slow normalization process, rather than a sharp hiking cycle.’ Meyer thinks the Fed will tread carefully when commenting on the weakness in China recently and unprecedented volatility across the stock market. ‘They could talk about financial conditions broadly and say that financial conditions have tightened, and as a result, would warrant a slower cycle [of normalization].’ TheStreet’s Scott Gamm speaks with Meyer from New York.
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