Now that the General Election is over, a University of Nebraska-Lincoln economist thinks the Federal Reserve will raise interest rates next month.
UNL Bureau of Business Research director Eric Thompson says productivity is still sluggish, but other indicators point to a rate hike.
“I think what’s changed is they’re a little more confident,” Thompson tells Nebraska Radio Network, “having a self-sustaining recovery and the fact that they’re starting to get increasingly concerned about inflationary pressures, because of the tight labor market.”
Thompson says the Fed’s increased confidence in the economy could trickle down and make businesses and consumers more confident.
“The markets don’t wait until the actual event,” he says. “Market swings as a result of an interest rate increase would tend to only occur if there was a surprise increase.”
Thompsons says a down side to the rate hike would be that some variable interest rates, like with credit cards, would go up as well.
The Federal Reserve meets Dec. 13-14.