Fed turns to Trump agenda with rate hike nearly in the bag

A police officer keeps watch in front of the U.S. Federal Reserve in WashingtonBy Howard Schneider WASHINGTON (Reuters) – The Federal Reserve inaugurates the Trump era this week with a near-certain interest rate increase and new economic forecasts providing a first glimpse into whether the U.S. election has reshaped the central bank’s growth and inflation outlook. Fed fund futures show a 97 percent probability that the Fed will lift rates by a quarter of a percentage point at the end of its two-day policy meeting on Wednesday, according to the CME Group. More telling will be whether the stock market rally and jump in bond yields triggered by Trump’s Nov. 8 victory will push the Fed to an inflection point of its own and a higher projected pace of rate increases for 2017 and beyond.

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