Weekly Economic Update: December 19 – December 23, 2016

December 19, 2016

CHART OF THE WEEK

The chart above shows the height of the federal funds rate—the interest rate the Federal Reserve “sets.” Since 2008 it’s remained at an historic low of less than 1%. Meanwhile, the monetary base, which measures the size of the Fed’s balance sheet, started to fall to $3.6 trillion from a high of $4.1 trillion in August 2014. Prior to the financial crisis in 2008 it was approximately $0.8 trillion.

For more details, please refer to the JEC’s recent release, Breaking the Conventional Mold: Monetary Policy Actions since the 2008 Financial Crisis.

LAST WEEK

News & Commentary Weekly Highlights:

Bloomberg: Three Ways to Measure Trump's Impact (Thursday)
Forbes: Obamacare Enrollment Year 3 Summary -- Increase In Mandate Penalty Has Not Improved Risk Pools (Thursday)
The Guardian: Greece on collision course with lenders as ESM freezes debt relief (Wednesday)
Yahoo Finance: Fed hikes rates, sees 3 more rate hikes in 2017 (Wednesday)
Market Watch: Trump rally could mark biggest postelection stock market rise since Hoover (Tuesday)
Bloomberg: Expect the Unexpected From Trump the Deal Maker (Monday)

Top Economic Indicator Highlights:

Federal Reserve's Federal Open Market Committee (FOMC) Meeting Statement
- Fed Funds Rate Target Range
  - New target: 0.50%-0.75%; Previous target: 0.25%-0.50%

Noteworthy: As anticipated, the FOMC opted to hike its interest rate target range for only the second time since 2008 when the range fell to 0.00%-0.25%. The FOMC announced that it expects three rate hikes for 2017.