So just when will the Fed raise rates?
The Federal Reserve's policy-making arm kept its options open Wednesday in deciding to leave short-term interest rates near zero for "an extended period."
Exactly when it ultimately will increase rates is a subject of much speculation in the investment community. It will be a powerful statement about the progress of the economic recovery and will affect everything from home loan rates to interest on bonds, to the immediate prospects for various sectors of the stock market.
Financial advisers and others attending the Morningstar investment conference were asked for their predictions Wednesday as to when and by how much the Fed might raise rates. Here's what five of them said:
• "With the housing market still soft, we're probably looking at a minimum of a year from now. I think they'll raise it by half a percentage point just to provide a needed shock to the system." — Eddie Ngo, certified financial planner with National Planning Corp., Redlands, Calif.
• "Next spring, by 25 basis points. They need better employment numbers and a lot of other things in order to see that they've won the battle against deflation." — Hobie Murnane, wealth management adviser, Northwestern Mutual Financial Network, Northbrook, Ill.
• "Early in the fourth quarter, by a quarter to a half percent. If there's a double-dip recession, it will take longer." — Maureen O'Hern, president of Encore Financial Group, Appleton, Wis.
• "In the fourth quarter, by a quarter-point. They almost have to. There's so much fear of inflation down the road, I think they have to step in by then." — Andrew Schartz, fund analyst, Sioux Falls, S.D.
• "The middle of next year, by a quarter or half point. Look at the housing numbers — they're pretty weak. And it's not clear what impact the European debt crisis is going to have. It could be a long slog." — Joseph T. Conklin, certified financial planner, New Hope, Pa.
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