The Federal Reserve is subtly heating up the markets for sooner expected higher rates.
Brought about by market’s unimpressive rates as that of last year’s January and August, Federal Reserve is setting up the market on Wednesday that there will be an increase in rates this coming June. Federal Open Market Committee’s statement on Wednesday after a meeting points out to a minimal impact which has been expected. Thus, investors should not assume that higher rates on June would not take effect.
At this very moment, disconnection exists between Fed and investors. Based on evident projections, Fed policy makers are foreseeing that there will be twice as much increase in rates this year. However, the fed-funds are saying that there is only a minute chance on June to occur. Now if this happens, what might be possible effect by the end of the year?