The Federal Reserve made few changes to its game plan on Wednesday. So why the surprise in markets?
Much reporting on the Federal Open Market Committee meeting this week focused on the central bank's projections for the economy and interest rates. Nobody anticipated a change in interest rates, but news stories asserted wonder among investors that officials still see another move higher by yearend and three more hikes in 2018.
This is especially baffling because the Fed has been pretty transparent all year, and has done largely as it said it would do. It ended 2016 telegraphing three rate increases in 2017 and a likely start to balance-sheet reduction. And voila, it's on course to have done precisely that.
