The Fed Signals a Rate Hike for the First Time in 2017

March 1, 2017 By E.J. Smith - Your Survival Guy

Fed officials are attempting to prepare the market for a rate hike in March as best they can. They proclaimed loudly on Tuesday that March is the right time. The market is listening. On February 22nd traders pegged the chances of a March rate hike at 35%, by Tuesday night odds had risen to an 82% chance. Early morning trading on Wednesday appears to show even more confidence in a March hike.

Also illustrating the market’s confidence in a March hike is the movement in the 12 month Treasury bill, which is typically sensitive to expectations of Fed funds rate moves. You can see in my chart below that the 12 month T-bill is leading higher as expectations for rate hikes solidify.

New York Federal Reserve Bank President William Dudley called the possibility of a rate hike in March “a lot more compelling,” thanks to the “animal spirits” being unleashed by the presidential election results.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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