The Federal Reserve Board is having their policy meeting this week. Investors and prognosticators are keeping a sharp eye on this meeting as this is the first meeting where Jerome Power chairs the board. From our vantage point, we think Jerome Powell is more hawkish than Janet Yellen, but this is not saying much. Ms. Yellen has spent a career cutting interest rates and printing credit. In our view, there has not been a harm money guy leading the Fed since Paul Volker.
The consensus view at the moment is that the Fed is expected to raise the overnight Fed Funds rate from 1.5% to 1.75%. This should not come as much of a surprise as the economy seems to be improving. Most observers expect the tax cuts to be a benefit to US economic activity going forward.
