investment review

December 31, 2017 - U.S. Fed Follows Through on Rate Hikes

The U.S. Federal Reserve raised interest rates by 25 b.p. at its meeting in December. The move was widely anticipated by the market. This was the third rate hike during the year and marked the first time in several years where the actual moves made by the Federal Reserve matched the forecasts outlined at the beginning of the year. Over the past couple of years, the number of interest rate hikes that occurred were lower than what was forecast. For 2018, the expectations are for the Fed to raise interest rates three times, although many economists are beginning to feel that four hikes may be more appropriate. The December meeting was the last meeting chaired by Janet Yellen as she turns over control to incoming Fed Chair Jerome Powell.

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