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How Many Fed Rate Hikes Should We Expect This Year?

The highly anticipated February jobs report was released Friday morning, giving an indication of President Donald Trump's impact on the nation's economy.

Monthly job gains for February, Trump's first full month in office, came in at 235,000. Analysts had predicted a rise of 190,000 jobs, down from 227,000 in January. The unemployment rate edged down from 4.8 percent to 4.7 percent.

Trump's Promise: Jobs Jobs, JOBS! 1:44

Fed Chair Janet Yellen noted last week that net new monthly jobs are currently well above the longer-run trend in labor force growth of between 75,000 and 125,000. As a result, Yellen said, the labor market is in the range of the Fed's employment goal and policymakers consider "it appropriate to move toward a neutral policy stance."

The Federal Open Market Committee meets on Tuesday, and is expected to raise rates for the third time in just about a decade. Traders are now focused on whether the Fed will signal a faster pace of tightening.

Paul Christopher, head global market strategist at Wells Fargo Investment Institute, expects two rate hikes this year, below the consensus for three.

"If it's a really strong report, plus 200,000 again, the market may start to decide to rethink whether it has priced in enough economic improvement for the year," he said. But "the odds we see the economy are going to be stronger than 2.3, 2.4 [percent growth] this year are slim. I think it's more likely the economy remains predictable — and therefore already priced in — and the [federal government] policy disappoints."

Expectations for a solid, if not strong, jobs number were high. After the private payrolls report came in well above expectations at 298,000 on Wednesday, Goldman Sachs raised its estimate to 215,000 and UBS increased its forecast to 225,000.