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LAST UPDATE:6/16/2018
CQM 061518 CQM 061518

As had been expected, the Fed raised the target range of the federal funds rate by 25 basis points to 1.75%-2.0% at the June 13 FOMC meeting. The current economy has been growing at an annual rate of more than 3% and the Fed’s price stability has been met realistically since 2017Q4, so the rate-hike of 50 basis points was not a bad idea and was common during the Greenspan era. Although the Fed stated, “. . .risks to the economic outlook appear roughly balanced,” the upward trends of both the real GDP and the aggregated indexes in CQM and PCA forecasts show that the upward risks to the economy are larger than the downside risks. The U.S. economy on the expenditure side seems to be cause for much more optimism than that on the income side. Real GDPs on both the expenditure and income side will converge to about 3.5% in 2018Q2.

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