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MP Wealth Advisors Blog
Federal Reserve PDF Print E-mail
Written by Dan Petrey   
March 16, 2017

Many of you may already be aware of this, but Janet Yellen and the Federal Reserve raised rates .25 basis points yesterday.  This move was expected and was already priced into the stock and bond markets.  Remember, the markets attempt to look ahead and measure future growth or weakness and that is reflected by prices.  Even though the move was expected, there can always be a surprise.  The Fed could have done nothing or even raised rates more than they did and while that is usually not the norm there can be some surprise expectations reflected in Yellens testimony or answers to questions.

Yellen stated that the Federal Reserve is expected to raise rates two more times in 2017. I believe that investors were worried the Fed might be more aggressive in 2017 and that was reflected in the “risk on” rally that took place Wednesday.  Another newsworthy event was released Wednesday by the Federal Reserve Bank of Atlanta as they reduced their expected GDP 1st quarter growth rate down to .9 % from 1.2%.  This perceived weakness may have also influenced investors hoping for a more “dovish” Fed going forward.

Remember, the Fed can always change their mind and can be dependent on future data as they attempt to measure the strength or weakness of the economy, but it sure seems like the path of least resistance for future rates are up for the foreseeable future.  

 
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