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Fed expected to raise interest rates but won't tell market what it wants to hear
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Loading...The markets want to hear whether the Trump economy could jolt the Fed into a faster pace of interest rate hikes, but there's little chance the Fed will send that message Wednesday, when it is expected to raise interest rates for the second time in 10 years.
"I think too much is unknown. They're not going to involve themselves in that. They're going to do what they can do based on the economic evidence at hand," said Jim Caron, fixed income portfolio manager at Morgan Stanley Investment Management.
"We do believe the market is getting a little ahead of itself. The flattening of the yield curve seems to suggest we're prepping for a hawkish Fed, but it's difficult to assume that a Fed that's been so historically cautious and has taken such a wait-and-see approach … is going to suddenly turn very aggressively hawkish when the president-elect hasn't even been sworn in yet," said Aaron Kohli, interest rate strategist, BMO.
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