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Federal Reserve Should ‘Stick to Their Guns’ in January Statement

When the central bank raised short-term rates for the first time in nearly a decade last month, Fed officials expected roughly four additional rate hikes in 2016.
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The Federal Reserve shouldn’t let the recent spat of volatility throw a wrench into their plans to make additional rate hikes this year, according to one analyst. ‘What the market wants to see is the Fed sticks to its guns and stick to the plan it has in place to move these rates higher,’ said James Hughes, chief market analyst at GKFX, based in London. ‘However, the market volatility that we’re seeing at the moment and the big swings in China and oil prices – these are the very reasons that the Fed didn’t raise in September when we all expected them to, so it’ll be interesting to see what they [think] this is going to do to the policy going forward.’ When the central bank raised short-term rates for the first time in nearly a decade last month, Fed officials expected roughly 4 additional rate hikes in 2016. TheStreet’s Scott Gamm reports from Wall Street.

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