Rates on the rise
At their December 14th meeting, the Federal Open Market Committee raised the federal funds target rate to between 0.50% and 0.75%. The 25 basis point increase was widely expected by financial market participants. Senior Federal Reserve officials’ revised their projections for future rate increases. There’s still a wide range of opinion, but the median forecast for the number of rate hikes in 2017 edged up to three (versus two in September). Raymond James’ Chief Economist Scott Brown cautions investors that the dots in the dot plot are not a plan. They are but an expectation. Actual Fed policy moves will depend on the economic data, with a focus on the job market and the inflation outlook.