How Does The Fed Think? It'S Really Hard To Guess.

Last month, the Federal Reserve finally launched its first increase in interest rates in the past ten years. In 2016, the domestic and foreign economies of the United States still had many uncertainties. What did the Fed say about decision making and how it would go? Some analysts believe that if we grasp a key point, it is not difficult to predict the future decision of the Federal Reserve, that is, the Fed does not want the market to be disappointed.

The Fed's policymakers aim to raise interest rates 4 times next year, according to the Federal Reserve's announcement of interest rate charts released by the Federal Reserve last month.

Since then, Atlanta's Federal Reserve Chairman, Lockhart, has also mentioned the possibility of raising interest rates for the 4 time next year.

But at the end of last month, Bloomberg news showed that the Federal Reserve would only raise interest rates 2 times next year, according to federal funds futures market data.

Deutsche Bank expects us in 2016.

The fluctuation may be much larger.

Jeff Cox, the financial editor of CNBC, points out that the problem with the market prediction is that the Fed has shown no intention of disappointing the market at all, especially the Federal Reserve Chairman Yellen.

Cox explained that the Fed repeatedly promised to raise interest rates in 2015, but waited until the end of the year, when the futures market showed that the Fed would almost certainly increase interest rates. Even if the US economy grew well enough in the past year, it could be described as a steady pace. It was hard to say, and it did not stop the Fed's almost final expectations of the market at the end of the year.

It is expected that the Fed's actions in the future will probably depend on the economic data and the market reaction as previously reiterated.

This week's Wall Street article noted that in 2016

The voting Committee of FOMC, the monetary policy decision maker, will replace the 4 members. Only 4 of the 4 commissioners will be Eric Rosengren of the Boston Federal Reserve.

Therefore, Cox believes that taking this action as a starting point, it is hard to justify the unexpected market forecasts.

From this experience, financial markets are the winners in predicting the trend of the Fed.

In terms of future actions, the Fed's emphasis on market expectations has been apparent, and there has been no sign of any wavering.

In October 2015, the futures market showed that the Fed was very likely to raise interest rates and then turned to the Fed.