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Fed Faces Pressure to Step Up Rate Hikes After Spending Package

  • Economists lift growth forecasts in response to legislation
  • Fed ‘doesn’t have the luxury to wait,’ JPMorgan’s Feroli says
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New York Fed President William Dudley says the selloff has no impact on Fed policy.(Source: Bloomberg)

The Federal Reserve will face growing pressure to accelerate its planned interest-rate increases after a nearly $300 billion spending package signed into law Friday juices a U.S. economy already souped up on tax cuts.

Economists at banks and consulting companies are busy marking up their economic forecasts in response to the legislation, saying it will help lift growth in 2018 to well above the 1.8 percent rate the Fed reckons is the economy’s long-run potential.