Several weeks ago, the Federal Reserve struck a dovish tone that allowed investors to let out a sigh of relief when it comes to future rate hikes. The Fed lowered its rate hike forecast from four hikes in 2016 to just two, and also lowered its long-term inflation expectations due to global uncertainty, explained TheStreet's Research Director Jack Mohr. But, a 'mini rebellion' had been building, after several non-voting Fed presidents said Yellen is being too easy when it comes to the rate hikes, added TheStreet's Action Alerts PLUS Portfolio Manager Jim Cramer. Mohr explained that the fed funds future rates is pricing in less than a 15 percent chance for an April hike, likely even lower now following Yellen's comments on Tuesday in New York, and less than a 50 percent chance of an increase before June. Right now, investors are banking on an increase in September, followed by another in December. But Mohr and Cramer cautioned investors not to put too much credence into those assumptions, given how far away it is.
At the time of publication, Jim Cramer's charitable trust Action Alerts PLUS held no positions in stocks mentioned.