Thoughts {03.18.15}

A quick thought between appointments and research meetings.  Markets will mark time today until after the Federal Reserve meeting this afternoon.  Most expect to come away from that with a better understanding of when {or if} the Federal Reserve will begin raising interest rates.  Most important will be to see how the markets react to whatever comes out of Washington.  

I think we'll see a rate increase in June.  I think we may see symbolic rate increases between a half and a full percent over the next year.  I think the markets will initially throw a hissy fit over this but at some point upon reflection, they will realize that a small rise in rates won't likely derail the economy and would be indicative of a stronger economy.  I don't think we'll see rate increases over the next year of much more than that because the economy won't be able to support it.  By that I mean for example in this environment I'm not sure a rise in mortgage rates of a half percent lock up the housing market.  I'm sure an increase of one or two percentage points will bring that to a standstill.  Anyway that's what I think.

I also know it doesn't matter what I think....Stay tuned for 1:00 PM Chicago time.