The Fed Rides Again

So the Fed met today and raised interest rates again for the 8th time in a year, to 3.0%. (Remember, the Fed can only raise short-term rates. Long-term rates, or bond yields, are set by the market.) While this may seem like a lot of rate hikes, the language used by the Fed in their statement indicated that they would likely continue to raise rates at a "measured" pace.

Most investors hoped that the Fed would drop the use of this language, and signal that maybe they were close to the end of this rate hiking campaign. But it looks like they aren't done yet. I am still in the camp that believes that they only have one or two more hikes to go, and then they will take a pause and assess the damage. Not really, but some industries will likely be affected more than others.

That's one of the hazards of this whole shooting match. The Fed hoped to cool off an overheated housing market by tightening monetary policy. But at last check, the housing market was still humming along just fine. But that's a debate for another post...