It is a common refrain inside the Federal Reserve. The central bank is "independent within the government." It even dedicates an answer on its online FAQ to make clear it is structured so it does "not become subject to political pressures."
It is earnestly independent and has fought hard in recent years to maintain that stance even in the face of congressional calls for an audit and accusations of Democratic favoritism. In an election filled with surprises, though, it's doubtful the Fed will provide one for investors less than a week before Election Day.
The bank's interest rate setting committee meets for two days in the week ahead. The group is widely expected to slightly increase its target interest rate before the end of the year.
In September, in fact, three of its members wanted to raise borrowing costs.
But, even though the Fed hold its independence sacred, and reams of economic data would justify a change in rates, the bank making such a move so close to Election Day would invite howls of protest and shouts over electoral influence.
So, don't expect a rate change in the week ahead _ but do expect one in December.
Let's be clear: Rates remain ultra-low, and any rate hike would likely be just one quarter of 1 percent. Already, though, market interest rates have risen _ slightly. The common 30-year mortgage rate is close to its highest level in four months, according to Freddie Mac. Car loan interest rates have been rising since June. Some of the weakness in the stock market has been attributed to the clear inclination of the Fed to raise rates one more time before 2016 is finished.
Politics feed off surprises. Investors abhor the unexpected. The Fed does not aim for shock, no matter the season.
