Fed on the Brink of Making Big Changes

Stronger auto and durable sales drove the markets' improved performance in the second quarter. In addition, retail sales recovered and business inventories grew. These are good signs that point toward a rebound for the economy.

Unless the economy falters again, we believe the Federal Open Market Committee (FOMC) will raise the federal funds rate in 2015 and then pause until the committee can see how that affects the economy. Watch for the FOMC to complete its bond buying and evaluate raising rates when the U.S. unemployment rate falls below its 6 percent target.

Learn more about housing and unemployment in the second quarter of 2014 and what's ahead for the second half of the year by reading my latest Investment Overview.