According to the FED, it takes 6 months for a rate increase to work its way into the economy. Immediate market reaction is meaningless, the market knew this was coming.
What this means is the FED is looking for higher growth under Trump than Fidel Obama.
The FED’s forecasts for the next two years are meaningless. Just take a look at their forecasts of the last two years.
They will see what happens and react, which is what they do. The illusion that they lead is just that, an illusion.
Also, a .25% raise is very small. When I was selling real estate about 20 years ago I went to bed one night with a couple of deals dependent on loans. People were “floating” hoping for a better rate. The next day the FED raised rates 1 full percentage point, and mortgage rates went from about 7 to about 8% overnight. That’s what happens in a hot economy. The FED was WAY behind the curve that time.
“According to the FED, it takes 6 months for a rate increase to work its way into the economy.” i don’t think that holds for short term rates. my guess is that in 2 months credit card rates will already be raised to reflect this increase.