April Finance Corner: Fed Reserve Monetary Policy

The Federal Reserve determines monetary policy in the United States. This policy is the major determining factor affecting interest rates. Control of the Fed Fund Rate is the single most powerful influencer of interest rates.
The Federal Open Market Committee is the policy making arm of the Federal Reserve. The language that is used in the presentation and the report that follows is scrutinized very carefully by industry analysts.
The announcement released on March 18th continues with the current rate. However, it has been noted by everyone that the word ‘patience’ was omitted from the report. The Fed Chairman, Janet Yellen was quick to remark that the absence of the word ‘patience’ did not mean that they would be ‘impatient’ with a decision to increase interest rates in the short term.

Most industry analysts have concluded that this move opens the door to the possibility of interest rates increasing before the end of 2015. Interest rates continue to be at historical lows. For business borrowers, now may be a prudent time to consider financing for equipment and vehicles.


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