Fed's Powell optimistic on economy, cites trade as new risk

The Feds may hike interest rates at this meeting, and that means Trump's Goldilocks economic policy might take a big hit where it hurts - in his base camp and public opinion.

Citing improving labor market conditions and inflation nearing 2%, the Federal Open Market Committee (FOMC) on Wednesday voted unanimously to raise the Fed Funds rate from 1.5%-1.75% - the highest since it's been since 2008.

The wild card: Would Jerome Powell, the new Fed Chair, alter the course Janet Yellen had set?

The head of the United States central bank says members of its rate-setting committee have reported "concerns" among business leaders over the impact of President Trump's protectionist agenda.

In a press conference with reporters, Powell also said that there was no sign of rising inflation at the moment, which has remained below 2%.

The "dot plot" shows an FOMC evenly split between three and four rate rises in the current calendar year.

The statement did not mention the extra government stimulus that has been added since the Fed's most recent economic forecast in the form of a $1.5 trillion tax cut and a budget agreement that will add $300 billion in government spending over two years.

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In the forecasts, USA central bankers projected a median federal funds rate of 2.9 percent by the end of 2019, implying three rate increases next year, compared with two 2019 moves seen in the last round of forecasts in December. That number could grow if the USA economy expands as fast and the unemployment rate falls as low as the Fed now predicts.

Its median projection for GDP rose to 2.7% in 2018 and 2.4% in 2019, up from 2.5% and 2.1%, respectively from the Fed's December projections. The higher rates are likely to be welcomed by savers but not by borrowers, who will face more expensive loan terms.

"The guidance in terms of the future rate hikes is a touch more hawkish than originally expected".

Officials also increased their expectations for economic growth this year in the United States, declaring that "the economic outlook has strengthened in recent months".

The Fed also raised its 2019 projection, saying it sees the benchmark rate at 2.9%, up from the 2.7% estimate it published in December. These forecasts represent participants' individual assessments of appropriate policy given their projections of economic growth, employment, inflation, and other factors at a particular point in time. According to Freddie Mac, the average 30-year, fixed mortgage rate last week was 4.44 percent-a dip from the prior week, but nonetheless on a tear.

Said said tax-oriented leases enable companies to take advantage of reduced rates that are passed through by the lessor, and in some instances, afford the opportunity to purchase the equipment at the conclusion of the lease at an agreed-upon value at the time of lease origination.

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