A Fitch viewpoint on FED's decision
The U.S.-based credit rating agency Fitch Ratings has announced that Fed's decision to raise interest rates may be an indicator that monetary policy will normalize faster than anticipated for 2017 and 2018. It was noted in a statement released by Fitch that Fed will be less likely to postpone interest rate hikes in the coming period, and that interest rate hikes are expected to be made gradually and in line with historical standards, in line with Yellen's comments.
The statement indicates that Fitch expects to see two 0.25-basis point rate hikes within the next year according to the latest estimates, but there are risks associated with a faster interest rate hike, and core inflation in the U.S. is still above 2 percent.
Noting that wage inflation has risen over the past 18 months, and unit labor cost has maintained a level above 2 percent, Fitch pointed out that unemployment is below natural rates according to several measurements, adding that this situation is more noticeable in the Fed's opinion.