Tuesday, December 13, 2016

One Change From The Fed On Wednesday

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*Fed Chair Janet Yellen and NY Fed President William Dudley both expressed a "wait and see" attitude regarding their targets.

*We don't expect much change in expected rate hikes for 2017 at this point.

*There is a chance for a change in wording that could be more bullish. That said markets are up a ton into Wednesday so reaction could go either way.

*We review what can decide the market's reaction which could take us into year end.

The Fed may raise rates, but likely will not change much else on Wednesday. Many investors will be watching for changes in its 2017 targets which it will update. It's likely that except for tweaks it will not change the number of expected rate hikes next year. We do think it could say that "risks have been reduced." We'll show based on recent Fed official comments what we can expect.
Federal Reserve Targets Likely To Remain Unchanged Wednesday
While it's well anticipated that the Fed will raise its key Fed Funds rate on Wednesday, we don't expect much change in its targets for rate hikes in 2017.
Here's what Fed Chair Janet Yellen recently said mid-November to Congress:
"We will be watching the decisions that Congress makes and updating our economic outlook as the policy landscape becomes clearer and taking into account those shifts in the economic outlook for the appropriate stance of policy."

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