Fed Comes A Little Bit Closer To Taylor Rule…

By Anthony B. Sanders

Raises Target Rate To 1.75% While TR Rudebusch Calls For 6.62% — Only 447 Basis Points To Go!

Yes, Jay (Powell) and the Americans (FOMC) came a little bit closer to The Taylor Rule (Rudebusch Model) with the FOMC voting to increase their target rate to 1.75%. The lower bound is now 1.50%.

The Taylor Rule (Rudebusch Model) calls for a Fed Funds Target rate of 6.62%. Only 447 basis points left to go, Jay!

The sentiment for 4 rate hikes in 2018 is growing.

The Fed Dots Plot for today’s meeting shows optimism over economic growth.

I was hoping that Jay Powell was going to sing a ballad to former Fed Chair Janet Yellen.