The quarter point increase was no surprise
The Federal Reserve raised its benchmark interest rate a quarter of a point to a range of 2.25 to 2.5 percent, according to NYTimes. The widely expected hike was the fourth one of the year.
Dig Deeper: The Fed’s statement emphasized the strength of economic growth — companies continue adding jobs and consumers keep spending money. It made no mention of recent turbulence in the financial markets.
Dovish forecast for next year… Fed officials signaled that there will be two more rate hikes next year instead of the expected three, according to the Washington Post. Of course, the Central Bank reaffirmed that all policy decisions will be data dependent.
Economic projections: The Fed expects the unemployment rate to fall to 3.5 percent, inflation to remain at 1.9 percent, and a GDP of 2.3 percent next year.
Heard on the Street: Credit Suisse: “If the Fed sounds overtly too dovish, it sounds like they’re trying to appease the equity market. If they end up being too dovish they run the risk of having us wonder what they know that we don’t know.”