What will the Federal Reserve do this year? January 24, 2018

The Fed enters 2018 with no clear plan for raising rates. At the last Fed meeting in December, 6 officials expected two rate hikes or less in 2018, 6 expected three hikes, and 4 expected four or more rate increases. More inflation will begat more hikes, but how much inflation increases is the great unknown. Fed forecasts have generally been overestimates, but not this year. If you take an average of the officials expectations, we can expect 3 hikes in 2018.