Boston Fed President Raphael Bostic (non-voter, hawk) said this morning he supports three more rate hikes in 2018 as more tightening is needed. He said that his optimism for the U.S. economy exceeds that of the "quite positive" forecasts from his FOMC colleagues. The Federal Reserve raised the short-term Fed Funds Rate at its March meeting and forecasts two more hikes in 2018. However, if inflation remains low, the Fed may have a tough time raising rates more than two more times this year, despite what Mr. Bostic has said.
Earnings season kicked off this week and there is a growing sense that corporate earnings for the first quarter will be rather strong and guidance may be more upbeat due to tax cuts/reform. JPMorgan Chase, Wells Fargo and Citigroup all posted better-than-expected numbers on Friday while BlackRock Inc., the world's largest asset manager, reported better-than-expected profits on Thursday. Earnings for S&P 500 companies are expected to rise 18.5% from a year ago, which would be the largest gain in seven years, according to Thomson Reuters.
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