Will 2018 Begin Like 2016?
The Fed in Dec of 2015 raised rates, with the market anticipating the increase. What it didn't anticipate was Stan Fisher coming out and saying there would be FIVE more rate increases in 2017!
The market goes into a tantrum, like the summer of 2013, until the Fed relents and backs off the rate increase threat.
The Fed was promising to get well ahead of the curve in 2016 and is doing it again, by now saying they don't have to wait on inflation to raise rates. True, but economic growth then has to be a barn burner which currently is starting to soften.
As always, every asset in the world revolves around the UST 10 yr. If the Fed moves ahead of the curve IEF will rally if it matches the curve, raising rates no faster than the economy grows IEF will fall.
Stay tuned...
