US Interest Rate Forecasts:

On Eve of Rate Hike #2 since 2008/2009

Back in early 2015 or about 3 months shy of 2 years ago, I blogged about the Fed's intentions to raise rates through the end of 2017. (Here's the link to that blog post).

In this blog, I will state what has occurred so far. But first, let me reiterate the Fed's plans from back in early 2015.

Back in early 2015, the Fed had projected the following rate increases:

• 0.5% increase by 2015 year end,
• 1.25% increase by 2016 year end, 
• 1.25% increase by 2017 year end.

Back in early 2015, the futures market had the following expectations for rate increases:

• 0.38% increase by 2015 year end,
• 0.75% increase  by 2016 year end,
• 0.6% increase by 2017 year end.

So, what transpired?

1) The Fed raised rates by 0.25% in December 2015. They are now 0.5%; see this source or this other source. (With time, the data at these sources may change and become irrelevant ...)

2) The Fed is expected to raise rates by another 0.25% when it meets later this month on Dec. 13 and 14.  See this source. The futures market is predicting with almost certainty that this raise will occur.

It is noteworthy that so far, the Fed has fallen short of not only its own projections but also the futures market's smaller projections.

What does this mean? I think it means that the economy is not strong enough to handle a higher interest rate.

For future reference, the following Wikipedia article documents the history of Fed's actions.

Author is also on Twitter