On Wednesday, March 15th at 2:00 PM ET, the Feds two-day meeting will conclude as they announce plans for upcoming Federal Funds Rate levels.
A strong February employment report, revealing the addition of 235K new jobs, was the last key economic indicator to solidify the case for a March interest rate hike. Should an increase take place on Wednesday, its widely expected to be the first of three rate hikes for 2017, and only the 3rd since the financial crisis of 2008. Economists expect the two remaining rate hikes to come in June (roughly 54% probability) and December (36% – 60% probability depending on previous decisions).
According to the CME FedWatch Tool, the likelihood of a 25-basis points rate hike is all but certain at 95%. While nothing is set in stone, rates remaining at current levels would be quite the shock to the financial markets considering the relative strength in nearly every Fed metric. A reluctance to act would only fan the flames higher for a wary presidential administration to continue to question the credibility of the Fed.
Trading during large economic events, such as a FOMC announcement, tend to trigger increased market volatility. Thus, its vial to approach the markets with sound risk/reward measures coupled with protective stops.
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