March 2017 – Fed Recap
We have a quick follow-up to yesterday’s post.
As expected the FOMC raised the target range for the Fed Funds rate this afternoon by 25 basis points to 0.75%-1.00%. However, It was not a consensus decision as the President of the Minneapolis Fed, Neel Kashkari, dissented. In addition, the verbiage in the FOMC’s statement and relatively less hawkish forecasts seems to have the market interpreting this as a “dovish hike.” A gradual pace of rate hikes continues to be the expectation.
Stocks rallied after the announcement and continued through the press conference as Janet Yellen stated “the simple message is the economy is doing well.1” Bond yields and the US Dollar fell in response. We did not get much information on what the Fed plans to do with its massive balance sheet nor did we get specifics around potential fiscal policy implications to the Fed’s outlook – just that these are developing considerations for the FOMC.
All in all, a positive outcome – the economy took another step towards normalization of short-term interest rates today while the markets received it generally in stride
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The views expressed herein are those of Douglas Ciocca on March 15, 2017 and are subject to change at any time based on market or other conditions, as are statements of financial market trends, which are based on current market conditions. This information is provided as a service to clients and friends of Kavar Capital Partners, LLC solely for their own use and information. The information provided is for general informational purposes only and should not be considered an individualized recommendation of any particular security, strategy or investment product, and should not be construed as, investment, legal or tax advice. Past performance does not ensure future results. Kavar Capital Partners, LLC makes no warranties with regard to the information or results obtained by its use and disclaims any liability arising out of your use of, or reliance on, the information. The information is subject to change and, although based on information that Kavar Capital Partners, LLC considers reliable, it is not guaranteed as to accuracy or completeness. This information may become outdated and we are not obligated to update any information or opinions contained herein. Articles may not necessarily reflect the investment position or the strategies of our firm.