Federal Reserve

Federal Reserve is preparing investors to think about 2017 hikes, former Fed advisor says

Bond market has changed its mind about future: Insana
VIDEO3:1303:13
Bond market has changed its mind about future: Insana

Wall Street is already expecting a Federal Reserve rate hike in December, and now the central bank is indicating it wants investors to turn their focus to next year, former Dallas Fed advisor Danielle DiMartino Booth told CNBC on Wednesday.

"They are shifting the goal post for, I think, the investing public to begin to concentrate on what kind of signals we are going to get ... at the press conference that follows the December meeting about the number of rate hikes we might see in 2017," she said in an interview with "Power Lunch."

"The focus has shifted well beyond December."

In the minutes from the Federal Open Market Committee's November meeting, released Wednesday, policymakers appeared confident the economy was strengthening enough to warrant interest rate increases soon. The next meeting is set for Dec. 13-14.

The November meeting occurred days before the presidential election. While Fed officials have downplayed the significance of President-elect Donald Trump's victory for near-term policy decisions, they have warned the central bank could raise rates more quickly if the federal budget deficit widens under Trump.

And while fiscal stimulus is expected under the new president, there are going to be other factors the Fed will have to take into consideration when it decides to hike, said DiMartino Booth.

"The Fed is incapable of ignoring what's going in China and in the emerging market dollar-denominated debt market," she said.

"The emerging markets are really taking it on the chin to a much greater extent than the euro is right now. The Fed has to be cognizant of the moves they make here and how they affect the interconnected global financial system."

— Reuters contributed to this report.