Why a Fed Interest Rate Boost Probably Will Wait Until December

Odds are strong that the Federal Reserve will wait until after the election to hike short-term interest rates. One big reason: to avoid taking heat in the middle of a brutal presidential political contest.

The economic impact of a 0.25 percentage point raise likely would be small. But the symbolic importance of an increase would be significant. “They don’t want to cause a ripple before the election,” says James Lockhart, vice chairman of investment firm W.L. Ross & Co.