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10Apr

NEW FED RATE HIKE; MARKET REACTION?

The past couple of years witnessed more speculation about interest rate hikes by the Federal Reserve than what was the reality. Many of the pundits were convinced we would see four increases during 2016 and they were wrong. The thinking has shifted in 2017 as some of the precursors that the Fed considers are starting a align and justify action on their part. A growing economy and real growth in the job market, with the accompanying uptick in inflation, is just the formula the Fed needs to raise rates; really. On March 15, 2017, the Federal Open Market Committee (FOMC) raised the federal funds rate again by a quarter point; the second such move in three months. They had raised the benchmark rate this past December as well. The two increases are expected to have some effect on short term lending rates. This has been a reversal of Fed policy,