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Fed Raises Rates for First Time in 2016, Anticipates 3 Increases in 2017
The U.S. Federal Reserve announced on Dec. 13, 2016, that it would increase its benchmark short term interest rate by 0.25 percentage point, to between 0.50% and 0.75%. The increase will also be reflected in business and household borrowing costs. The Fed also announced its intention to make 0.75% percentage point increase in 2017, possibly in 3 quarter percentage point moves. The Fed's forecast is for the fed-funds rate to reach 2.1% at the end of 2018, and 2.9% at the end of 2019. The Fed's policy is based on a sense of strong labor market with unemployment falling, and says it is based on discussion at a 2 day meeting, and "in view of realized and expected labor-market conditions and inflation." This reflects a view that there is now not that much slack in the labor market, that further improvements could trigger higher inflation.
Fed forecasts for inflation are for it to increase from 1.5% in 2016 to 1.9% in 2017 and to the target of 2% in 2018. The unemployment rate of 4.6% in 2016 is forecast to go to 4.5% in 2017 and remain at that level till 2019. Economic growth is forecast at a median annual rate of 1.9% in 2016, 2.1% in 2017, only a slight improvement from last forecast in Sept. 2016. Support for chairwoman Yellen's policy decision was unanimous. See the link on views of NYT's Binyamin Applebaum and Neil Irwin on how Fed rate policy and economic growth under the Trump administration is likely to play out, and Ian Talley's report on impact on exports with a stronger dollar in WSJ. These views also are in line with the Fed's forecasts and policy decision as they reflect the concerns of the Fed about inflation, and also reflect the Fed's view that growth will be close to 2% in 2017-2019, and not the 3-4% stated by Trump and Treasury Secretary Mnuchin. Fed rate policies to keep inflation at about 2% tend to counter stimulus spending by the Trump administration and effect of tax cuts. The size of the stimulus and the tax cuts are also likely to be much smaller than stated because of Republican concerns about the deficit in the U.S. Congress, according to these views. The stronger dollar also has the paradoxical effect of making trade gains more difficult while increasing trade friction in tougher bargaining supported by Trump, making the higher growth targets harder to reach.
Views on U.S. economic growth and Federal Reserve interest rate policy in 2017-2018
12/14/2016
Neil Irwin, Binyamin Applebaum of NYT, and others offer views on how Federal Reserve interest rate policy can come out in ways different from what is expected.
Grouped Articles
Will the Trump Era Bring Higher Interest Rates? Don’t Count On It
The New York Times 12/14/2016
A Trump Economic Boom? The Fed May Stand in the Way
The New York Times 12/13/2016
Will Trump herald a US economic boom?
The Guardian 12/07/2016
How Donald Trump May Actually Widen the U.S. Trade Deficit
WSJ 12/12/2016
Fed Raises Rates for First Time in 2016, Anticipates 3 Increases in 2017
WSJ 12/14/2016
The Fed’s Era of Easy Money Is Ending
The New York Times 03/13/2017
U.S. economy- 2011-2013
02/03/2011
The U.S. economy upswing after quantitiative easing (QE II) steps taken by the Federal Reserve.
Grouped Articles
Wall Street Journal 04/28/2013
Uncertainty Is the Enemy of Recovery
Wall Street Journal 04/28/2013
U.S. Stocks Shrug at China's Woes
Wall Street Journal 07/10/2013
Wall Street Journal 08/01/2013
In Surprise, Fed Decides to Maintain Pace of Stimulus
New York Times 09/18/2013
That 2014 Growth Breakout? Not Looking Likely
Wall Street Journal 03/02/2014
Krugman on how the stronger dollar and the weaker euro will hurt U.S. export competitiveness and growth in 2015-2016
03/13/2015
Europe will export some of its problems to the U.S. in 2015-2016, as the euro goes to parity with the dollar and makes European products more competitive with U.S. products in global markets. This will hurt U.S. growth. Yet it is important for the U.S. that Europe get out of its deflationary trap, and as for exchange rates and flows of capital this is how the global economy works with little that the U.S. can do about it, says Krugman. He believes many Federal Reserve governors were clueless about the impact of this on the U.S. growth in their March meeting as they pushed for higher rates, merely assuming that the situation it will turn out positively for the U.S. Krugman says that with growth in wages sluggish and low inflation the Federal Reserve needs to be very careful as it considers raising interest rates.
Grouped Articles
New York Times 03/13/2015
Weaker Euro Ripples Around World
Wall Street Journal 03/13/2015
Strong Dollar Stands in Manufacturing Sector’s Way
Wall Street Journal 03/16/2015
Torrent of Cash Exits Eurozone
Wall Street Journal 03/23/2015
U.S. Trade Gap Widens on Surging Imports
Wall Street Journal 05/06/2015
The New York Times 06/06/2016
The broken link between economic growth and jobs in the U.S. during the recoveries of the last 2 decades
02/14/2013
Grouped Articles
Growth isn’t enough to help the middle class - The Washington Post
Washington Post 02/14/2013
'Secular Stagnation' May Be for Real
Wall Street Journal 08/27/2014
Hillary Got It Right About Growth
Wall Street Journal 06/18/2015
Robust Jobs Report Spurs Fed Watch
WSJ 08/05/2016
The Economy’s Hidden Problem: We’re Out of Big Ideas
WSJ 12/06/2016
Fed Raises Rates for First Time in 2016, Anticipates 3 Increases in 2017
WSJ 12/14/2016
Length of U.S. economic expansions 1950-2015, and the forecast for the current expansion beginning in 2009
04/21/2014
Robert Hall, a Stanford economist who heads the NBER committee that studies industrial production, income, employment, retail sales, for turning points in the economy says the current economic expansion shows clear path ahead with increasing corporate earnings. Based on past experience adverse unpredictable shocks happen that end the expansion. Because of how slow this expansion is taking place and Yellen's sense of slack in the economy providing room for employment and incomes to grow, the current expansion has still a lot of life left in it. The Fed forecast is for 90 months into 2016, and the CBO forecast is for 102 months into 2017. Some of the growth in incomes and employment takes place in the late stage as happened in the Reagan expansion in the 1982-90 period.
Grouped Articles
Sluggish Economic Recovery Proves Resilient
Wall Street Journal 04/21/2014
'Secular Stagnation' May Be for Real
Wall Street Journal 08/27/2014
Hillary Got It Right About Growth
Wall Street Journal 06/18/2015
The New York Times 09/16/2016
The Economy’s Hidden Problem: We’re Out of Big Ideas
WSJ 12/06/2016
A Trump Economic Boom? The Fed May Stand in the Way
The New York Times 12/13/2016
Trump's economic plan and how it increases the U.S. deficit by $5.3 trillion
09/22/2016
The sharp contrast between the Trump economic plan which is very unusual for a Republican candidate in that it substantially increases the U.S. debt by $5.3 trillion, and the Clinton economic plan which only modestly increases the deficit by $200 billion. The impact is about one fourth increase of the national debt of $19 trillion under Trump and only 1% under Clinton's economic plan, according to the Office of Management and Budget.
Grouped Articles
New Clinton, Trump budget numbers
POLITICO 09/22/2016
Donald Trump’s Plans Would Add $5.3 Trillion to the National Debt
Fortune 09/22/2016
Clinton Seeks Big Jump in Estate Tax
WSJ 09/22/2016
Donald Trump’s Tax Pitch Could Miss Trade’s Strike Zone
WSJ 10/05/2016
Donald Trump’s Tax Plan Would Boost Economy in Short Run but Not Long Term, Analysis Finds
WSJ 10/17/2016
Donald Trump’s Economic Plan, Up Close, Doesn’t Add Up
WSJ 10/18/2016
The puzzle of continuing U.S. job gains in 2014-2015 with tepid wage growth, low productivity, and low economic growth
03/06/2015
Weak business investment, low productivity, slack in the labor market, and more low paying jobs are some of the reasons explaining the puzzle of job gains in 2014-2015 with small wage gains.
Grouped Articles
Sluggish Productivity Hampers Wage Gains
Wall Street Journal 03/07/2015
After a Bounce, Wage Growth Slumps to 0.1%
New York Times 03/06/2015
The New Jobs Report Shows Janet Yellen’s Quandary in a Nutshell
New York Times 03/06/2015
Slowing Job Growth Tests Economy
Wall Street Journal 04/04/2015
U.S. Economic Growth Nearly Stalls Out
Wall Street Journal 04/29/2015
The Mystery of Declining Productivity Growth
Wall Street Journal 05/15/2015
U.S. quarterly GDP and economic growth for 2012-2013
04/27/2012
Grouped Articles
Wall Street Journal 04/28/2013
Economy May Be Getting Its Wings Clipped
Wall Street Journal 07/30/2013
Wall Street Journal 08/01/2013
BofA Chief Says Fed Will Keep Pace
Wall Street Journal 11/07/2013
U.S. Economy Begins to Hit Growth Stride
Wall Street Journal 12/21/2013
U.S. Starts to Hit Growth Stride
Wall Street Journal 01/30/2014
The U.S. and world economy in 2017 with the incoming Trump administration
12/07/2016
Grouped Articles
The Economy’s Hidden Problem: We’re Out of Big Ideas
WSJ 12/06/2016
Fed Raises Rates for First Time in 2016, Anticipates 3 Increases in 2017
WSJ 12/14/2016
Aging Population, Stagnant Productivity Challenge Donald Trump’s Growth Plan
WSJ 12/04/2016
Opinion: Trump in offside position | Business | DW.COM | 12.01.2017
DW.COM 01/12/2017
Within Trump’s inner circle, a moderate voice captures the president’s ear
Washington Post 04/14/2017
Trump Plans to Seek Tax Rate of 15% on Owner-Operated Companies
WSJ 04/25/2017
U.S. quarterly GDP and economic growth for 2016
09/19/2016
Grouped Articles
October Surprise? U.S. Economic Growth May Accelerate Just Before Election Day
WSJ 09/19/2016
Fed Raises Rates for First Time in 2016, Anticipates 3 Increases in 2017
WSJ 12/14/2016
G.D.P. Report Shows U.S. Economy Off to Slow Start in 2017
The New York Times 04/28/2017
U.S. GDP Growth Revised Up to 3% Pace in the Second Quarter
WSJ 08/30/2017
The global economy in 2015-2016- slowing growth in China, Brazil, Russia and Turkey, as growth picks up in the U.S. and India, and Europe emerges from the eurozone debt crisis
11/29/2015
High debt to GDP ratios in China, Brazil and Turkey lead to slowing growth. India is the exception in emerging markets as foreign investment increases and GDP growth is above 7%, with a boost from halving of oil prices. Europe sees the need for more quantitative easing, and the U.S. makes a slow recovery. Russia may see an improvement after a large devaluation of the ruble. Argentina's prospects are seen as improving with a change in government. Canada sees a change from the drift in the last years of the Harper government and the hollowing out of the industrial sector, with the election of Justin Trudeau. Overall the situation in 2015-2016 is a marked improvement compared to ten years earlier in 2005, as debt issues are tackled seriously in Europe and the U.S. and governance in the private sector improves.
Grouped Articles
Tensions With Russia Add to a Chill in Turkey’s Economy
New York Times 11/29/2015
China Unveils Economic Blueprint for 2016
Wall Street Journal 12/22/2015
Oil Prices at $30 Bend Nations, But Which Ones Could Break?
Wall Street Journal 01/13/2016
Putin’s self-destructing economy - The Washington Post
Washington Post 01/18/2016
Russian Economy Stumbles as Stocks and Oil Prices Fall
New York Times 01/21/2016
Emerging-Market Debt: How Big a Threat Is It?
Wall Street Journal 02/16/2016
The U.S. Federal Reserve and the populist movements of 2016 of Trump and Sanders
08/26/2016
By missing the signals of the bubble in financial markets and letting the mortgage crisis develop upto the point that the overleveraged banks had to be rescued and the global economy went into a deep recession, the U.S. Fed created the conditions for the populist movements of 2016. Very low rates designed to help the economy recover hurt savers, further depressing the financial assets of the middle and working class. The lack of access to public colleges hurt upward mobility, and the high cost of tution led to parents assuming large amounts of student debt further depressing their condition. The assets of middle and working class people revealed at a Boston Fed sponsored Inequality conference in Oct. 2014 were shocking- the average net worth of the lower half of the distribution in the U.S., or 62 million households was an average of $11,000, with one quarter at zero net worth, according to Janet Yellen, the chairman of the Fed, America's central bank.
Grouped Articles
Years of Fed Missteps Fueled Disillusion With the Economy and Washington
WSJ 08/26/2016
From Trump to Brexit rhetoric: how today's politicians have got away with words
The Guardian 08/27/2016
Apple should repay Ireland 13bn euros, European Commission rules - BBC News
BBC News 08/30/2016
Apple must now pay its taxes. This is a vindication of protest | Owen Jones
The Guardian 08/30/2016
The Economic Expansion Is Helping the Middle Class, Finally
The New York Times 09/13/2016
Fed, With 3 Officials in Dissent, Stands Firm on Interest Rates While Noting Improving Economy
The New York Times 09/21/2016
U.S. GDP and economic growth in 2013
12/20/2013
Grouped Articles
Revision Shows U.S. Growing at Fastest Rate Since 2011
New York Times 12/20/2013
U.S. Economy Begins to Hit Growth Stride
Wall Street Journal 12/21/2013
U.S. Starts to Hit Growth Stride
Wall Street Journal 01/30/2014
5 Takeaways From the GDP Report
Wall Street Journal 01/30/2014
That 2014 Growth Breakout? Not Looking Likely
Wall Street Journal 03/02/2014
'Secular Stagnation' May Be for Real
Wall Street Journal 08/27/2014
Pathways for the U.S. economy in 2014-2018- Martin Feldstein
05/16/2016
Grouped Articles
The Economy’s Hidden Problem: We’re Out of Big Ideas
WSJ 12/06/2016
Fed Raises Rates for First Time in 2016, Anticipates 3 Increases in 2017
WSJ 12/14/2016
Structural solutions for U.S. jobs growth and economic growth- 2011-2020
01/04/2010
Michael Spence and other experts discuss longer term solutions to the high unemployment facing the U.S.
Grouped Articles
Uncertainty Is the Enemy of Recovery
Wall Street Journal 04/28/2013
Confronting Old Problem May Require a New Deal
New York Times 01/28/2014
Bayer: Pressure on Prices Has Bad Side Effects
Wall Street Journal 02/07/2012
The world economy: Wealth without workers, workers without wealth
Economist 10/06/2014
Why the Old Jobs Aren't Coming Back
Wall Street Journal 06/24/2011
Middle-Aged Job Hunters Struggle in Weak Recovery
Wall Street Journal 07/30/2011
Comparison between GDP and economic growth recoveries after the 2009 U.S. recession with earlier recessions
01/14/2010
The curve for recovery in economic growth after 2009 shows a long recovery period compared to earlier recessions going back to the 1970's.
Grouped Articles
Wall Street Journal 08/01/2013
5 Takeaways From the GDP Report
Wall Street Journal 01/30/2014
Wall Street Journal 05/30/2014
U.S. Economic Recovery Looks Distant as Growth Stalls
New York Times 06/11/2014
'Secular Stagnation' May Be for Real
Wall Street Journal 08/27/2014
U.S. Third-Quarter GDP Expands at 3.5% Rate
Wall Street Journal 10/30/2014
U.S. quarterly GDP and economic growth for 2014-2015
03/02/2014
Grouped Articles
That 2014 Growth Breakout? Not Looking Likely
Wall Street Journal 03/02/2014
Wall Street Journal 05/30/2014
U.S. Economic Recovery Looks Distant as Growth Stalls
New York Times 06/11/2014
U.S. Economy Shrinks by Most in Five Years
Wall Street Journal 06/26/2014
In U.S. Data, a Baffling Contradiction
New York Times 07/10/2014
Strong Growth in G.D.P., but Some Caveats
New York Times 07/30/2014
The role of exports in the U.S. economic recovery by 2015-2017 and the threat posed by a stronger dollar
03/19/2015
The views of the U.S. Commerce Secretary Pritzker, and McNerney, head of the U.S. Export Council. About one third of the U.S. growth rate comes from exports in this economic recovery, say Pritzker and McNerney.
Grouped Articles
The Engine That Pulled Us Out of Recession
Wall Street Journal 03/19/2015
U.S. Economic Growth Nearly Stalls Out
Wall Street Journal 04/29/2015
U.S. Trade Gap Widens on Surging Imports
Wall Street Journal 05/06/2015
Dollar’s Rise Lifts Imports and Widens Trade Gap
New York Times 05/05/2015
U.S. Trade Gap Shrinks by 19%, Most in Six Years
Wall Street Journal 06/03/2015
Forget the New iPhone. For Apple, It’s All About the Dollar.
New York Times 03/26/2016
Kenneth Rogoff, on the prospects for the U.S. and global economy under the Trump administration in 2017-2020
12/08/2016
Grouped Articles
Will Trump herald a US economic boom?
The Guardian 12/07/2016
Fed Raises Rates for First Time in 2016, Anticipates 3 Increases in 2017
WSJ 12/14/2016
Aging Population, Stagnant Productivity Challenge Donald Trump’s Growth Plan
WSJ 12/04/2016
Opinion: Trump in offside position | Business | DW.COM | 12.01.2017
DW.COM 01/12/2017
Within Trump’s inner circle, a moderate voice captures the president’s ear
Washington Post 04/14/2017
Trump Plans to Seek Tax Rate of 15% on Owner-Operated Companies
WSJ 04/25/2017
U.S. quarterly GDP and economic growth for 2015
08/28/2015
Grouped Articles
GDP Numbers Reveal Underlying Momentum, Possible Headwinds for U.S. Economy
Wall Street Journal 08/28/2015
China Slowdown Could End Up Being Good News for U.S.
Wall Street Journal 09/08/2015
U.S. Economy Grew at 1.5% Rate in Third Quarter
New York Times 10/29/2015
U.S. Economic Growth for 3rd Quarter Revised Up to 2.1%
New York Times 11/24/2015
Final 3rd-Quarter Estimate Shows U.S. Economy Growing 2%
New York Times 12/22/2015
U.S. Economy Barely Grew Last Quarter, Stoking Concerns About Momentum in 2016
New York Times 01/29/2016
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