With a March rate hike considered a near certainty, investors are looking ahead to the key question: how many times will the Fed raise rates this year? Fred Katayama reports.
The blizzard slamming the northeastern U.S. didn't keep Fed policymakers from holding their scheduled meeting in Washington Tuesday. That key gathering is widely expected to result in a hike in interest rates Wednesday. So Wall Street is already looking ahead to the question: just how many times will the central bank hike rates this year? Economists polled by Reuters expect two more hikes following a March rate hike. Kevin Kelly of Recon Capital Partners. SOUNDBITE: KEVIN KELLY, CHIEF INVESETMENT OFFICER, RECON CAPITAL PARTNERS, (ENGLISH) SAYING: "I think you're going to want to see guidance of no more than three rate hikes this year. I think the market will really embrace two rate hikes. I think some people want three but considering we haven't had policies being made to take the economy further, two would really be celebrated." Wall Street pros will be combing the Fed's statement for clues on how to trade. Washington Crossing Advisor's Chad Morganlander: SOUNDBITE: CHAD MORGANLANDER, PORTFOLIO MANAGER, WASHINGTON CROSSING ADVISROS, (ENGLISH) SAYING: "I think it's not going to cause a disruption to the markets if the language and the signal from the Federal Reserve is somewhat dovish. But if they continue to be a little bit more - let's say - a little hawkish and actually give a signal to the overall market that they'll be aggressive in raising their rates, that's going to have a strong impulse to the U.S. dollar, and that will create perhaps more volaitlity to the overall equities markets as well as the credit markets." Or if - SURPRISE - the Fed decides NOT to hike on Wednesday, Kelly says that could spook the markets into thinking: what bad news does the Fed know that Wall Street doesn't.