Published: Tue, March 21, 2017
Economy | By Annette Adams

Gauging the Impact of the Fed's Rate Hikes

Gauging the Impact of the Fed's Rate Hikes

"When the data really call for it, then we should remove accommodation". Before his time at Treasury, Kashkari was a vice president at Goldman Sachs.

"If the growth outlook solidifies and I have more confidence that inflation is going up, three for the entire year is entirely reasonable", Evans, who has always been an advocate of a patient approach to raising rates, said earlier on Fox Business.

There are three Fed officials below the three-hike line: two who say the range between 75 basis points and 1% was appropriate, and one who said another quarter point was appropriate.

The widely anticipated Fed hike last week, only the third in almost 11 years, took the overnight fed funds rate to a target range of 0.75 percent to 1 percent.

US unemployment has dipped to 4.7 percent, which is near the level most Fed officials see as consistent with maximum employment.

But comments made by Chicago Fed President Charles Evans, typically one of the more dovish members at the central bank, may suggest that he is part of the majority who expect three interest rates in 2017. "As I gain more confidence in the outlook, I could support three total this year". Notably, economist Jonathan Smoke shared the following view on the Fed's rate hike on March 15: "Today's Fed announcement is going to have the greatest impact on first-time home buyers as they consider their monthly payment budgets".

St. Louis Fed President James Bullard has previously said he only forecasts one increase this year.

Markets will be keenly awaiting Fed cues this week with no less than nine policy makers set to speak, including Chair Janet Yellen on Thursday.

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