Fed rate hike expected: 4 things to know

NY Fed president: 'Animal spirits have been unleashed'

An East Coast blizzard hasn’t stopped the Federal Reserve by its two-day meeting.

A Fed rate hike is usually expected at the end of its widely watched meeting Wednesday. the item would likely be the Fed’s second rate hike since December as well as a sign which the central bank’s leaders are moving interest rates up at a faster pace This particular year.

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“the item’s truly time to move,” says Dan North, chief economist at Euler Hermes, an insurance firm.

Here’s 4 things to know before the Fed’s announcement Wednesday at 2 p.m. ET.

1. A rate hike reflects a healthier economy

America is usually still adding jobs at a healthy clip, unemployment is usually low as well as wage growth continues to gain momentum. Those positive trends clear the way for the Fed to raise rates further.

The Fed put interest rates at 0% in 2008 to help the collapsed housing market recover during the Great Recession.

nevertheless America is usually no longer in crisis mode, as well as the item can weather higher interest rates. The Fed raised rates once in 2015 as well as 2016, nevertheless This particular year its leaders project they’ll increase rates three times.

Still, rates are very low historically.

2. the item’s all about the dots

Almost all investors are expecting a rate hike Wednesday. The real newsmaker for financial markets will be the Fed’s “dot plot.” the item’s a chart which effectively shows how many times Fed leaders think they’ll raise rates This particular year as well as in upcoming years.

The last dot plot arrived in December as well as a completely new one publishes Wednesday.

3. Yellen to push back on Trump’s plans

Fed Chair Janet Yellen holds a press conference Wednesday. While she’ll certainly discuss the economy as well as the Fed’s decision on interest rates, she will likely be asked President Trump’s plans to dismantle Dodd-Frank, the financial regulation reform the Fed enforces.

Dodd-Frank was created after the financial crisis to prevent risky behavior by Wall Street banks. nevertheless Trump sees the item as a burdensome regulation as well as plans to repeal much of the item.

Yellen has already pushed back against Trump’s plans to get rid of Dodd-Frank. Look for more staunch defense of Dodd-Frank on Wednesday.

4. The beginning of the end for the Yellen Fed?

By April, three key governor positions at the Fed will be open, Yellen’s term ends in January, as well as the Fed’s No. 2, Stanley Fischer’s, ends in June 2018.

All positions must be appointed by Trump, who was heavily critical of Yellen during the campaign. He will be able to quickly reshape the Fed’s leadership inside coming months. Many of Yellen’s colleagues have served with her since the Great Recession or soon after the item ended in 2009.

Trump’s treasury secretary, Steven Mnuchin, has eased the administration’s tone on the Fed since taking office. Still, the item’s unclear if Trump will reappoint Yellen for another term.

CNNMoney (completely new York) First published March 15, 2017: 12:01 AM ET


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