The Federal Reserve voted Wednesday to raise interest rates by a quarter percentage point to between 0.75% and 1%. Wednesday’s move was the first in 2017 and only the third in the past decade. Fed officials in economic projections accompanying their statement suggested it remains appropriate to raise rates two more times this year....MORE
Here are some early reactions from economists.
“An opportunistic Federal Open Market Committee raises rates…With nine members expecting three hikes in 2017, the FOMC seems in no more of a hurry to normalize rates in March than it was in December despite the recent shift in communications. By hiking today and not steepening its median policy path, we view today’s decision as the FOMC taking advantage of favorable financial market conditions as opposed to an opening step to a faster pace of rate increases.” — Michael Gapen and Rob Martin, economists at Barclays PLC
“The major difference between the current statement, and the previous one, from Feb. 1, is that the Federal Open Market Committee is now more confident about higher inflation. There are three changes from the previous statement related to inflation, all making the point that inflation is now close the FOMC’s 2% target, and that it should remain there.” — Gus Faucher, PNC deputy chief economist
“Officials still appear to be holding off on incorporating any significant fiscal stimulus in their projections, even as sentiment measures have been boosted by hopes for stimulus. The implication: Enactment of fiscal stimulus could be a trigger for raising growth and funds rate projections later, while absence of significant stimulus could still keep them on track for three hikes per year.” — Jim O’Sullivan, chief U.S. economist at High Frequency Economics Ltd.
“The committee is simply taking one day (or meeting) at a time and is unable or unwilling to signal aggressively that monetary policy is too easy. Nontheless, the acknowledgement that inflation is basically at the Fed’s target…is a clear admission that monetary policy is now operating under a different paradigm.” — Stephen Stanley, chief economist at Amherst Pierpont Securities
Wednesday, March 15, 2017
"Economists React: ‘An Opportunistic Federal Reserve Raises Rates’"
From Real Time Economics: