*By Lauren Babbage*
A two-day meeting of the the Federal Reserve's Open Market Committee was to begin Tuesday, when central bank officials will consider a potential second rate hike this year.
There are a number of challenges the committee will face, in addition to an uptick in inflation. The economy may be near full employment, but wages haven't increased. The country's fiscal spending, according to the Congressional Budget Office, may increase the national debt as a percent of GDP to a higher level than Italy in five years.
One might expect to see the economy pullback, but that's not been the case.
"It's like 2 A.M., everyone has been partying all night, and the federal government comes out and goes, 'No no, we're going to keep going for a lot more hours' and now the Fed has to try to keep everyone healthy," said Lenore Hawkins, the chief macro strategist at Tematica Research. "That's like, alright, start doing the shots of espresso, but the Fed is trying to keep everyone from getting the jitters. This is not an easy thing for them to do."
Investors were spooked last week when the 10-year Treasury note hit 3 percent for a brief period, and Hawkins said that nervousness will continue.
The market is seeing a decrease in liquidity, which means an increase in volatility, she said. That is heightened by the increasing debt of the U.S. Treasury.
For full interview, [click here](https://cheddar.com/videos/the-fed-interest-rate-face-off).
Pilots at American Airlines have voted to authorize a strike, and Southwest Airlines pilots are preparing to join them, as unions put more pressure on the airlines to approve new contracts with hefty pay raises.
Cheddar News takes a look at The Day Ahead as the Federal Reserve's two-day meeting kicks off on Tuesday while earnings season continues with some big-name companies such as Ford, Pfizer, Starbucks and Uber on tap to report quarterly results. The JOLTS report is also due to be released ahead of April job numbers.
Dan Geltrude, managing partner of Geltrude & Co., joined Cheddar News to discuss why it's vital for a college student to begin budget preparations early for college tuition. "It's developing good financial habits," he said. "I'm a strong proponent that in high school, there should be some teaching, some course ... about personal finance."
Brian Vendig, president of MJP Wealth Advisors, joined Cheddar News to discuss the market ahead of the Federal Reserve's meeting on Wednesday and as investors digest JPMorgan's takeover of First Republic Bank, which was recently seized by regulators. A slew of earnings are also slated to be released this week as well.
