The Fed will hike rates by 0.25% at its March meeting; here's why

Two speeches this week -- one by the Chair and one by a Fed governor -- illuminate the plans
  • Global inflation has turned a corner, and no matter what, inflation is the first-response duty of all central bankers. The Fed sees ours as at its target.
  • If long-term rates do not rise as the Fed hikes the Fed funds rate, then the Fed will either raise funds higher and faster, or dump its bonds and MBSs faster.

First, the good news: The economy is doing so well that the Federal Reserve will increase the cost of money by 0.25 percent on March 15, up to the 0.75 percent-1.00 percent range. All Fed officials have been on the same page, rare unanimity.