Fed Funds Target Rate Increased with Unanimous Vote
Thursday, December 15, 2016
The FOMC has decided to raise the target range to 0.50% – 0.75%. This 25 bps upward adjustment to the Fed Fund rate was almost guaranteed, as the futures implied probability of an additional hike had increased from ~75% at the beginning of November to 100% in the days leading up to the meeting. There was even a small chance that a 50 bps could have taken place, although the unanimous decision illustrates Chair Yellen’s ability to reign in the four more hawkish Committee members that had previously projected a higher year-end rate. Growth: The official statement indicated that “economic…