Friday, June 23, 2017
Economic fundamentals continue to be the focus as the Federal Reserve did recently raise the target range for the federal funds rate by 25 basis points to 1.00-1.25%. Investment markets barely registered a reaction, and another hike by year-end is a strong possibility. The Fed has a blueprint to reduce the size of their balance sheet after years of quantitative easing. They will reduce $10 billion per month in Treasuries and mortgage backed holdings for three months, rising until they are cutting the balance sheet by $50 billion per month. As this plan unfolds, consumers can keep an eye on the jobless rate and anticipated inflation around 2 percent.