Fed Policy Outlook: the FOMC will almost surely will hike rates again this year
Fed Policy Outlook: the FOMC will almost surely will hike rates again this year unless something untoward happens to keep policy on hold. While the BLS noted the net effect of the hurricanes was to reduce employment, there was "no discernible effect on the national unemployment rate." Strength in recent data had already injected significant risk into a December rate hike, and the hence the drop in the jobless rate to 4.2%, a 16-year low, will be duly noted by the Fed, and especially the hawks. The climb in earnings is what many Fed officials have been wanting to see as well. Along with a December tightening, analysts're also expecting three hikes next year, consistent with the Fed's dot plot, with risk of more, rather than fewer moves, especially if the administration is able to get the tax reform and other stimulus measures in place. Additionally, the choice of a Fed chair, and other Board members will be crucial for the rate outlook. Fed funds futures are pricing in about 80% chance for December, with over 90% risk for two more in 2018.