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U.S. NEWS Tuesday 13 december 2016

US Financial Front:

With Fed expected to hike, attention turns to what it says

Yet how the Fed will devise Wall Street, for its part, has the White House and Con- porate profits.
its rate policies in light of already signaled its re- gress will allow Trump to cut Some Fed watchers expect
Trump’s policies isn’t clear sponse to Trump’s election: taxes, ease regulations and faster growth to cause the
and might not be clear Investors have sent stock accelerate infrastructure central bank to shift its fo-
even after it issues a state- prices surging to record spending. Many appear to cus from trying to energize
ment and Chair Janet Yel- highs and driven up longer- think those actions, in turn, the economy to consider-
len holds a news confer- term rates in anticipation will increase economic ing ways to counter the risk
ence Wednesday. that Republican control of growth, inflation and cor- of too-high inflation. q

Federal Reserve Chair Janet
Yellen testifies on Capitol Hill
in Washington. A full year after
the Federal Reserve raised a
key interest rate for the first
time in nearly a decade, it is
widely expected that they
are finally ready to raise rates
again at their final meeting of
2016.
(AP Photo/Susan Walsh)

MARTIN CRUTSINGER
AP Economics Writer
WASHINGTON (AP) — There
isn’t much doubt about
what the Federal Reserve
will do when its latest policy
meeting ends Wednesday:
It’s all but certain to raise its
benchmark interest rate —
its first increase in a year.
The real anticipation sur-
rounds what Fed officials
may or may not say about
the pace of future rate
hikes against the backdrop
of Donald Trump’s elec-
tion.
Will they signal that they
expect to raise rates very
gradually in the coming
year? Or will they say the
risk of high inflation result-
ing from Trump’s tax and
spending plans may re-
quire accelerated rate
hikes?
On this, economists and
investors agree: The Fed
will raise its key rate by a
modest quarter-point to a
range of 0.5 percent to 0.75
percent — a move that will
likely lead to slightly higher
rates on some consumer
and business loans. The Fed
last increased rates last De-
cember, when it raised its
benchmark rate from a re-
cord low set at the depths
of the 2008 financial crisis.
“Never has the Fed tele-
graphed a rate hike as
thoroughly as this one,”
said David Jones, chief
economist at DMJ Advi-
sors.