Fed Sees 3 More Hikes In 2017; 'Fiscal Boost Not Needed,' Yellen Says [SHE CAN BE FIRED NOW]

Investors Business Daily ^ | Dec. 14, 2016 4:36 PM ET | JED GRAHAM

[expat_panama]

The Federal Reserve raised its key interest rate by a quarter point on Wednesday, as expected, but policymakers signaled a likelihood of three increases in 2017, up from prior expectations for two moves.

In her post-meeting press conference, Chair Janet Yellen called the change in outlook "a very modest adjustment" in the path of Fed policy.

She noted that some members, but not all, factored in some fiscal stimulus following the election of Donald Trump, into their forecasts, even though his policies are still being crafted. The lower jobless rate, which fell to 4.6% from 4.9% in November, also was behind the more hawkish outlook.

The Fed decision comes as economic growth is on the upswing...

...When Fed policymakers last detailed their economic projections in September, they signaled two more quarter-point rate hikes in the coming year and three additional hikes in 2018...

IBD'S TAKE: Optimism is running high over Donald Trump's agenda of lower taxes and more infrastructure spending, yet there are three big factors that could limit what he can accomplish: 1) High deficits and strict budget rules; 2) A tight job market; and 3) A possibility of rising trade tensions that could backfire...

...some members factored a Trump fiscal package into their rate-policy projections,..

...In September, 10 of 15 Fed members projected two (or fewer) rate hikes in 2017. The new projections show 5 of 15 members now see only two rate hikes...

...For most sectors, the benefits of better growth are outweighing the drag from higher interest rates...

"We're getting to the point where further rises in Treasuries, certainly above 3%, would start to have a real impact on market liquidity in corporate bonds and junk bonds (and) bring into question some of the aspects of the stock market and of the housing market in particular."

[expat_panama]

This is how she can be fired for cause.

She came out clearly opposing Trump fiscal policy spending which is beyond her authority:

 ....     the Federal Reserve plays no role in determining fiscal policy.   (from here)

and it also deviates from previous Fed compliance with congress' clearly written and understood guild lines (from here):

After the war ended, the Truman administration tried to continue price-wage controls, as well as its control over Fed monetary policy. However, in the mid- and late 1940s, Congress abolished most controls, then passed a resolution that reintroduced the principle of “independence” into Fed policymaking. The resolution emphasized that the Fed would be responsible for monetary policy and the U.S. Treasury for fiscal policy, and that “they should stay out of each other’s backyards.” It also charged both bodies to aim toward the goals specified in the Employment Act of 1946— that is, to “considerations relating to [policies’] effects on employment, production, purchasing power, and price levels.” Fed and Treasury officials ratified this congressional mandate in the famous “accord” of March 1951.

Fiscal policy was not in the Fed's FOMC press release yesterday, but at the press conference (youtube link above) she meantioned it 19 times.  While she tried to assure us that she wasn't giving advice on fiscal policy at the same time she clearly gave advice and the news core left convinced that she had.

For that she could be held in contempt of congress and Trump could fire her.

[Paladin2]

Quit, Yellen.

We've had enough.

[novemberslady]

Bttt

[Nicojones]

Raising rates now is the equivalent of letting obama max out our credit cards on an eight year, drunken spending binge, and asking us to pay for the consequences. If she would have shown this level of interest rate aggressiveness during his tenure, it would have significantly curtailed his spending and limited his agenda. She is clearly a Dem tool.

[DoodleDawg]

For that she could be held in contempt of congress and Trump could fire her.

No he can't. She can be impeached but not fired.

[broken_arrow1]

The Fed isn’t a government agency.

[DoodleDawg]

The Fed isn’t a government agency.

Quasi-government. But the Fed Chair is appointed by the Executive. They can be impeached for cause, though I don't see anything Yellen has done that would fall under that.

[CincyRichieRich]

Fire her for politicization of the Fed. Simply saying 4.6 percent unemployment is real is enough reason. If she believes that, then she is too stupid...if she doesn’t, but says she does, then is too stupid and political.

Thus, she is in a catch 22 ...Fire her for both reasons...she can pick her favorite.

[PGalt]

Old Yeller should be summoned to the top of Trump tower and tossed.

[duckman]

Turned her off when she said the economy was doing good, my words, and unemployment is a 4.6%

[Gadsden1st]

“Give me control of a nation’s money
and I care not who makes the laws.”

[teppe]

O’Bama comes in rates lower ....Trump comes in rates higher?

Is there a pattern?

Either the Feds know that Trump will create prosperity just as O’Bama ravaged it, or they are trying to prop up the socialists and sabotage the conservative/business people.

[pieceofthepuzzle]

You knew she would do this, and you know she is incredibly partisan. She doing this in the middle of the Christmas season, including predicting three future increases next year - thus potentially affecting even Christmas spending.

Even though these rate increases likely needed to happen, she held off on them when they thought increases would hurt Obama or Hillary. This is happening now specifically because the market was rallying in the context of the Trump election. Yellen is an academic, as is her husband, and has no real world experience. The academy hates Trump, and it is probably particularly irritating to them that he picked people with a track record in business, rather than pedigreed academics, for his advisors and cabinet.

[exit82]

How did this mop headed gnome with a speech impediment ever rise to the head of the Federal Reserve?

[urbanpovertylawcenter]

The Fed is the biggest US dept holder and just want some front load to garnering their “share” of the coming Trumponomic BOOM!

Cut them off!

[rollo tomasi]

Yellen is just a cog, influential one, but still just a cog among several governors of the Federal Reserve (However I think there are a couple of vacancies).

[wastoute]

She can’t be fired but the Fed can be...

[expat_panama]

She can be impeached

Big deal.  Clinton was impeached by the House but the Senate failed to remove him from office.  The point here is that she's given cause for removal.  If that's not actually "firing" then it'll do fine until she can be officially fired for real.

[wastoute]

Winner. Right there is the whole point. The Fed propped up Zero’s entire eight years and it was still a disaster. She just made our grandchildren pay for it all.

[castlegreyskull]

All designed to crash the economy on a Republican President’s watch so that a pimp like obama can come in to act like he fixed everything.