Today Janet Yellen announced that the Federal Reserve is following through with its planned third rate, moving the effective federal funds rate to 1.25-1.5%. This move was widely expected, and considered to be “priced in”. As I noted in October, one of the most surprising winners of Trump’s presidency has been Yellen. Prior to 2017, Yellen’s Fed had consistently whiffed on its projections, eliminating the usefulness of its forward guidance.
As far as the rate hike itself goes, it’s worth noting that the Federal funds rate remains historically low, on par with Greenspan’s policies the mid-2000s.
While today was Yellen’s last FOMC meeting, we should expect to see little change in ideology under Jay Taylor.
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