The Fed indicated that it would raise interest rates four more times before the end of 2016, but traders in the financial markets do not believe it. They expect only two increases next year. Lack of confidence in the Fed on interest rates can complicate the work of directing the US economy next year and beyond.
Beyond that, the difference shows that financial market participants, correctly or not, do not believe that the Fed will raise rates as fast as they say. To justify higher rates, the Fed will need to see stronger economic growth and increase inflation, which is below the Fed's target of 2 percent, said Jacob Oubina senior economist at RBC Capital Markets.
E.Dimitrov JrTrader
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