The year's third Federal Reserve rate increase is anticipated at the conclusion of Wednesday's two day policy meeting. The announcement is scheduled for 2 pm ET followed by outgoing Chair Janet Yellen's final news conference 30 minutes later.
.The expected 25 basis point rise in the Fed Funds target rate would bring the range to 1.25%-1.5%. This would be the highest for this benchmark since October 2008, a month that saw two 0.25% cuts in the midst of the Fed's six year campaign to limit the damage and rescue the U.S. economy from the effects of the financial crisis
Today's increase will be the fifth since the Yellen Fed began raising rates from 0.0%-0.25 in December 2015 where they had been for almost seven years.
Markets will be focused less on the increase, which has long been priced into trading levels, and more on the FOMC's projections for interest rates, inflation and economic growth in 2018, 2019 and beyond.
With the economy likely to expand at 3% or more for three consecutive quarters for the first time in more than a decade, prospective tax reform close to completion in Congress and U.S. interest rates far below thier historical norm, there is the distinct possibility of a quickening pace of rate increases in the next two years.
Chief Market Strategist
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Fed Funds Rate Upper Target