Wednesday, December 19, 2018

BREAKING Federal Reserve Hikes Key Interest Rate

Fed chairman Jay Powell
As expected, the Federal Reserve, at a regularly scheduled monetary policy meeting of the FOMC, has raised by 25 basis points the interest rate it directly controls.

The range for the Federal Funds rate has been increased from 2.00%-2.25% to 2.25%-2.50%.

This is the 9th hike in the current series of hikes.

It should be recalled that at the time of the first hike Austrian-lites were forecasting an immediate stock market and economic collapse and stated that that first rate hike would have to be reversed.

It is now nearly three years later and I have only recently become nervous about the stock market. I haven't yet issued a full PANIC warning in the EPJ Daily Alert for the entire economy but I am getting close.

The full Fed statement is here.


Officials voted unanimously Wednesday on the increase.


The dot plot projections show:

11 of 17 officials expect the Fed will need to raise rates no more than two times next year, compared to seven out of 16 officials in September. Just six officials expect the Fed will need to raise rates three times or more, down from nine officials in September, and six officials believe the Fed may need to raise rates no more than once, up from three officials in September.



  1. Interesting to see how they respond if stagflation does occur

  2. Jerome pwell said inflation is still under 2%. What metric is he using???