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'More Aggressive' Fed Could Emerge in 2017

NEW YORK CITY—If economic projections pan out, “it will be appropriate to raise interest rates more rapidly,” says Cushman & Wakefield's Ken McCarthy.

By Paul Bubny | paulbubny | Updated on December 15, 2016

Cushman & Wakefield's Ken McCarthy “You want to get ahead of the curve if you’re the Fed,” McCarthy says.

NEW YORK CITY—A modest increase in the short-term federal funds rate was generally expected as an outcome of the Federal Reserve’s December meeting that concluded on Wednesday, and so it came to pass. Arguably more telling were signals in the Federal Open Market Committee’s statement that Wednesday’s quarter-point increase could be followed by multiple increases next year. Not so long ago, there were at most two rate hikes on the Fed’s long-time horizon through 2018.

“What the Fed actually ends up doing will very much depend on the state of the economy at the time they meet,” Cushman & Wakefield’s Ken McCarthy tells GlobeSt.com. “A year ago, the general expectation was that by the end of this year, the federal funds rate would be somewhere between 1.25% and 1.5%.” In fact, Wednesday’s move by the Fed will bring the rate into a range between 0.50% and 0.75%. “Obviously, we didn’t get there.”

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