The Fed added language that its liftoff path is expected to be consistent with 2% inflation.
The factors driving the participation rate higher since November are somewhat different from those earlier in 2016.
Bullish reaction does not change the stubborn facts about policymaking in Washington.
The Fed wants the option to hike in March but lacks the conviction to do so.
All told, we think the prospects that President Trump will push through his policy agenda in the first year look tenuous at best.
An improving growth picture gives fodder to the Fed to increase rates this year – possibly several times. It should also be a signal for capital preservation and liquidity investors.
When looking past the noise, we believe the data have continued to confirm our forecast for 2.2% core inflation in 2017.
Does détente mean the greenback has already peaked?
The Fed kept rates on hold despite growing confidence that inflation will hit its 2% target.
It’s important to consider which variable would dominate real estate-related asset prices in a potential new paradigm: higher rates or stronger growth.