Another Fed meeting in the books, and another 25 basis point rate hike bringing the Fed Funds Rate to the 1.25 – 1.50% range.

Effective Federal Funds Rate:

They also announced that beginning next year they will be reducing their balance sheet by 20 billion a month.  At that pace it’ll take 15 years to get back to where it was in 2009.

Federal reserve banks total assets:

Every Fed meeting is a little depressing for me.  I just can’t believe we’re winding down 2017, comfortably the 2nd longest bull market in history and 9 years removed from the financial crisis, yet interest rates are still this low and the Fed balance sheet is still 4.5 trillion.  I know I sound like a broken record every three months after another meeting, but it just strikes me as irresponsible and I suspect a large price will be paid at some point down the road for all of this.

Anyway, here’s the dot plot for anybody who follows this stuff.  You can see the path the FOMC members are looking at going forward.  I try to be an optimist in all things but to be honest I’m not that confident we’ll even see 3% rates for a very long time.

Fed “dot plot”

 

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