Weekly Market Commentary 09/28/2018

The emotional and riveting Senate Judiciary Hearings for the Supreme Court nominee dominated the news cycle this week, overshadowing a rather mundane Fed policy meeting. While there is still some suspense over the full Senate vote for confirmation, Fed officials followed a well-telegraphed script, voting for another quarter-point rate hike at the two-day confab that ended on Wednesday. The increase, the eighth since the zero-rate policy was abandoned on December 2015, lifted the federal funds rate to a range of 2.00-2.25%. Another increase is planned for December and three more in 2019, at which point the policy rate will be firmly ensconced in the 2.5-3.5% range that the Fed believes is “neutral”, i.e., neither accommodative nor restrictive.