The Fed (Federal Reserve) recently increased its standard interest rate a quarter-point but decreased its estimations for future hikes. As markets had anticipated, the Fed took the target range for its standard funds’ rate ranging from 2.25% to 2.5%. This move has spotted the fourth hike in this year and the ninth as it started normalizing the rates in December 2015. It came in spite of President Donald Trump’s tweets in opposition to rate hikes, where Trump stated, “It is unbelievable that the Fed is even in view of another interest rate hike.”
Administrators now estimate two hikes in the next year, which is a decrease but still ahead of the present market cost of no extra moves in the next year. The post-meeting statement reported, “The committee judges’ feels that a few further slow increases in the target range for the Fed funds rate would be reliable with strong labor market conditions, uphold the expansion of economic activity and inflation near the committee’s balanced 2% intention over the average term.” Alongside the hike, financiers had been agitated on where the FOMC (Federal Open Market Committee)—which fixes the rates—is expected to direct in the future.
On a similar note, recently, Wells Fargo’s rate specialist predicts the Fed decision could be a turning point for markets. The Fed delivered its judgment on interest rates and many of the biggest financial firms, counting Wells Fargo, hoped that it would cool down Wall Street. Michael Schumacher—Head of Global Rate Strategy at Wells Fargo—stated to CNBC that the Fed would reduce the number of rate increases for the next year. In spite of that prediction, Schumacher did not consider that it would have any relevance with the current stock market correction.