Fed Chair Suggests Fewer Rate Hikes in 2019

Fed Chairman Jerome Powell is walking back his assessment of the economy which caused the markets to drop in December, now saying we may not see as many interest rate hikes in 2019.

Twice this month, he said the central bank is likely to lower its forecast from two interest rate hikes this year amid volatile financial markets and a slowing U.S. and global economy.

“Right now the market is not pricing in any rate cuts, but they're not pricing in any rate hikes either for all of this year,” says Pat Shinn, certified financial planner with Heritage Asset Advisors.   “So, right now at least, the market thinks the Federal Reserve is on hold.”

Shinn says all of this depends on a trade deal with China.

“If we make a deal, I think there's a number of investment experts who think things will pick back up again,” he says.  “Not to the degree they did last year, but we think growth can pick up and the markets will respond accordingly, meaning hit a new high.”

If that happens, at least one rate hike is likely later in the year.

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