The Romans called March 15th the “Ides of March.” With the financial markets still climbing to all time highs, there’s something eery about the fact that the Federal Reserve Board is set to meet on that very day in 2017. This figure to be a very important meeting, aside from the fact the markets are expecting a interest rate hike to come out of the going ons.
At 2:00 p.m. ET on Wednesday, March 15, the Fed will announce its all-important policy announcement. With so much at risk, the financial markets will be looking for direction, having already factored in a highly anticipated rate hike of between .25% and .50%. Adding to the notion the number could be the latter was the release this past week of a positive economic reports that showed the U.S. economy had added 235,000 jobs as the unemployment rate fell to 4.7% in February.
The biggest question at hand is will Fed Chair Janet Yellen tip the committee’s hand regarding future interest rate increases? The assumption is the Fed might have to increase rates 2-4 more times in 2017 in order to keep the economy and stable and inflation under control.
According to P Morgan economist Michael Feroli, regarding a possible March rate hike, “We, and consensus, expect a hike for the simple reason that the Committee has effectively told us they would. It remains a mystery why they reached a tipping point last week and what pushed them past that point, but there is little mystery what the message was in the final communication before the blackout period.”
Assuming the committee’s announcement fails to give any future indications, it will be up to the financial markets to decide exactly what that means. For anyone who believes the stock market is currently overbought, a cloud of mystery might be all it takes to signal it’s time for a small correction.