The Fed became more hawkish with last week’s moves.

The FOMC did more than just raise managed rates last week. In addition to the 25 basis point increase in the target rate for Fed Funds, they also made significant changes in other areas. They changed theirguidance for future moves from three increases in 2018 to four. They maintained their guidance for three more increases in 2019. They changed the language in the statement released at the end of the meeting to much more positive phrasing. They said economic growth is solid instead of improving as they have said in the last three years. They removed the sentence that has been included for the past five years about keeping managed rates low for an extended period of time. They increased their economic and inflation forecast. Finally, they announced they were going to host a press conferencefollowing every FOMC meeting beginning in January instead of every other meeting as has been the case. The last move increases the flexibility the Fed has as to the timing of any action they take since the market only expected changes when there was a press conference scheduled. Taken in total, these changes represent a significant move to a more hawkish stance by the Fed…

ProBank Austin Advisor-June 18, 2018