As universally expected, the Fed today raised interest rates for the second time in this economic cycle, with that hike coming a full year after the first increase and more than seven years after the current expansion began. With the economy much closer to full employment now and a strong likelihood of a fiscal stimulus next year, however, we expect the Fed to accelerate the pace of tightening next year, with one rate hike in the first half of next year followed by three in the second half.
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