Most advisors expect the Federal Reserve to raise interest rates 25 basis points on Wednesday, in line with most analysts’ predictions, and they don’t believe the Fed’s announcement will have a significant impact on the markets. But advisors said they’d be more concerned if the Fed didn’t raise rates this week, or if the agency takes a more aggressive approach.

“Since this expected announcement has been telegraphed to the market, I wouldn’t expect a significant reaction,” said Marc Pfeffer, senior portfolio manager at CLS Investments in Omaha, Neb. “Personally, I believe it would be more of a negative to both the equity markets and the long-end of the treasury market if they decided not to raise.”

SIFMA’s Economic Advisory Roundtable anticipates an interest rate hike of 25 basis points this week, with survey respondents citing improving labor conditions, readings of financial developments and inflation or inflationary expectations.

Read the Full Article