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How the Rest of the World Paved the Way for a March Fed Hike

U.S. data has been good enough to allow the Fed to hike, and global risks haven't soured the outlook
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IG's Lucas Sees Markets Pricing in 3 Fed Rate Hikes


In just a week, markets went from doubting a March rate increase to viewing one as a sure bet. The central bank's top brass engineered the change by speaking in favor of a hike, culminating in Fed Chair Janet Yellen's endorsement on Friday. 

What changed to push central bank policy makers from the neutral stance that Fed-watchers saw in their January meeting minutes to the brink of a rate increase? Not much, if you're looking at U.S. data. The fact that nothing deteriorated was enough to clear the hurdle for a March rate move, especially because steady domestic data have come alongside a slowly-improving international outlook – a major shift from the situation at this time last year, when global risks helped to stay the Fed's hand.