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March Rate Hike and Fed Policy

The market now sees 3 rate hikes instead of 2 for for 2017.  We have had this position for some time in our previous forecasts.

Regarding the pace of rate hikes, it depends on economic growth and inflation.  Surveys currently are at very high optimism levels  The economic signals have been mixed, but inflation in my opinion will surprise to the upside.  That is not good news for the stock market.

Our current position is a certain hike in March with the potential of a 0.35 or 0.5 move.  For 2017, we see three strong hikes or possibly four hikes.