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Wednesday, September 21, 2016

Fed In December Remains Base Case

I looked at the information that came out after the Fed announcement, and it still looks like a hike in December is the base case. No matter how dovish you want to be as a result of "risk management" considerations, it is very hard to see how one rate hike per year is going to tip the economy over into recession. Worries about confidence shocks point in favour of rate hikes -- "See, the economy is so strong that the Fed has to hike rates!" I will leave the immediate commentary to the people who do full-time Fed watching; I may write a longer comment later if I see anything interesting after the dust settles.

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