Federal Reserve Law Enforcement officers stand outside the Federal Reserve building in Washington, D.C.
Photo by Chip Somodevilla via Getty Images
By Matthew Heimer
December 14, 2015

The staff of Fortune recently assembled its predictions for 2016. Here’s one of our forecasts.

The federal funds rate at the end of 2016 will be 0.5%, up from 0.25% this November. Expect the Federal Reserve to raise its interest rate targets once between now and then—but only once, as U.S. economic growth stays steady but slow, while inflation and wage growth also remain modest. Fears of seeming “political” during a presidential election year, sluggish growth in the Eurozone and a slowdown of the Chinese economic juggernaut will also keep Janet Yellen and the rest of the Federal Open Markets Committee from pulling the trigger more often; their vacillation will be one of the year’s longest-running (and least loved) dramas.

This article is part of the 2016 Fortune Crystal Ball, a package of 33 predictions about business, politics and the economy by the writers and editors of Fortune. To see the entire package, click here.


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