Weekly Market Commentary 06/15/2018

The Federal Reserve took center stage in the financial markets this week, overshadowing for the moment the steady drumbeat of volatile events in Washington or on the geopolitical front. Despite grabbing the spotlight, however, the much anticipated policy meeting provided little in the way of surprises for investors. As expected, the Fed increased its benchmark short-term rate by another quarter point, marking the second increase this year and the seventh since the lengthy zero-rate policy was abandoned in December 2015. The latest increase in the target range to 1.75-2.0% will not be the last if policy makers follow through with their current strategy. At the meeting, the median forecast of Fed officials looked for two more increases this year, three more in 2019 and two in 2020. When all is said and done, the rate-hiking cycle is expected to top out at 3.4% in 2020.