Fed’s ‘expedited meeting’ sends shivers through Wall Street

Wall Street got a little unnerved on Friday by the announcement of an unscheduled Federal Reserve meeting this Monday.

The Fed announcement said its board of governors would get together “under expedited procedures” at 11:30 a.m. Monday for a “review and determination … of the advance and discount rates to be charged by the Federal Reserve Banks.”

The “Government Sunshine Meeting Notice” is not unusual. Over the past several months there have been other notices with the exact same language.

Still, Wall Street was rattled when this notice started making the rounds midday Friday. The stock market was up considerably earlier in the day but gave back about half of those gains when the Fed notice surfaced.

Wall Street is expecting the Fed, headed by Janet Yellen, to raise interest rates at its Dec. 15-16 meeting. But that’s still three weeks away, and anything can happen between now and then to derail the increase.

The central bank desperately wants to increase borrowing costs for several reasons. One of the most practical reasons is that if the economy goes into a recession, the Fed will need to cut rates, which have been near zero for seven years.

So if the Fed doesn’t raise rates now, it won’t be able to lower them later when the economy needs to be rescued.

The Labor Department will announce the November employment report before the next Fed meeting. And it’s not likely to be as good as the last report.

In addition to that, things like declining retail sales are an ominous sign for the economy going forward.

Those are some of the reasons that this “expedited meeting” notice got more attention than the last few. Something like a quickie rate hike could be in the works — but probably not.