This rate hike from the Fed could be the last

The Fed raised Wednesday a new point, as expected. The projections of the decision makers published at the meeting of the Fed indicate a new rise in December and three others in 2019, as in June.

X

This meeting of the Fed brought no surprise, but the next few months could be full. The big question seems to be when, if not, the Fed's concern over the overheating of the economy will give way to worries about the possibility of a slowdown too fast.

With the peak of the unforeseen Fed already taken into account, Wall Street rebounded before 14h. announcement on the stock market today. After the end of the Fed meeting, the Dow Jones Industrial Average, the S & P 500 Index and the Nasdaq Composite increased their gains. The Dow Jones rose 0.4%, the S & P 500 0.5% and the Nasdaq composite 0.7%, all close to the highs of the session. The 10-year Treasury yield was 3.08%, prior to the announcement.

While Fed Chairman Jerome Powell has spoken throughout the year of headwinds from the economy to headwinds, the prevailing wind is now reversing. That's because there are now several forces aligned to cool what has been a growth explosion. The Fed's policy is, of course, one of those. The Fed has gradually tightened its policy to the point that it is no longer accommodating.

In Wednesday's policy statement, the Fed dropped the language that the policy is accommodative, but offered a trajectory of rising rates indicating a restrictive stance.

Powell will be held at 2.30 pm ET press conference.

China's trade war is an economic wind

Here's what's strange in the Fed's updated economic projections: policymakers now see faster GDP growth next year – 2.5% vs. an estimate of 2.4% in June – while the trade war President Trump grows. While climbing the battle is still a modest hurdle, it should harden. Customs duties of 10% came into effect on Monday on 200 billion additional dollars in Chinese imports. This rate will rise to 25% by January 1 if both parties can not agree, and for the moment, they do not even speak.

Rising oil prices may be another growing obstacle. After withdrawing from the Iran nuclear deal, Trump is ready to impose sanctions on Iran as of November 5, forcing other countries to stop fighting. buy Iranian oil. Analysts warn of a potential spike in oil prices.

Then there is the federal tax policy. The tax cuts and spending increases have propelled the economy this year, but their effect will fade in the first half of 2019.

While the Fed knows that higher tariffs and the end of fiscal stimulus are coming in, policymakers are keeping their eyes on current and strong economic data, and continue to appear hawkish. Few economists think the data will turn fast enough to prevent the Fed from surging in December, but that could happen. For 2019, it's fair to say that Wall Street is not buying the Fed's rate hike intentions. Until now, the markets expect a rise in single rates during the first 10 months of the year, which is in contradiction with the expectations of the decision-makers of the Fed regarding three increases.

Fed policymakers are increasingly talking about the need for a restrictive monetary policy even though they do not consider inflation a problem. Policy makers' projects now see the Fed's preferred inflation gauge, the personal consumer price index, up just 2.0% in 2019, compared to a previous median forecast of 2.1%.

YOU COULD ALSO LIKE:

Trump's first speech in America at the UN Square Wall Street second

3 main software stocks: two in the shopping range, we add a potential handle

These drug stocks are driving the market higher; Will Netflix burst?

tock market today: follow market trends and the best stocks to watch